Hainan Tax Free Program to Start from Sanya in April

Domestic tourists will be able to claim tax refunds for goods purchased in south China's island province of Hainan from April 20 when a pilot off-shore duty-free program goes into effect. The sesort city of Sanya will be the first to begin the practice.

Our reporter Wang Jing takes a look.

A Duty Free store near Luhuitou Square in Sanya is the only one designated for the new tax policy for the moment.

Chen Zhifeng, deputy director of Haikou Customs, says Chinese tourist wishing to purchase in the store needs to show necessary documents.

"Tourists need to show valid identification documents and accurate information of their return flights when they shop in the duty-free store."

After goods are chosen and payment is made, the goods will be wrapped up and transported to Sanya Phoenix International Airport. Tourists will be able to pick-up their goods at the airport.

The new policy has also laid down detailed limits on the refund.

Non-locals can enjoy the duty-free privilege twice a year while resident from Hainan province will only one opportunity to take advantage of the deal.

Meanwhile, a tourist would not need to pay tax on items within a total value of 5,000 yuan, but any amount exceeding that will be subject to preferential taxation.

Shen Shuhai from the department of customs and tariff in the Ministry of Finance, says the limits are designed to refrain purchase that aims to make profit out of the price difference.

"The policy is mainly to attract people outside the province to travel on the island. Normally, a tourist will not visit the island more than twice. The 5,000 yuan criteria is based on the situation of China, and is higher than Japan's Okinawa island and South Korea's Cheju Island."

The scheme is part of the province's plan to build the island into an international tourist destination. It is estimated that the island received 24 million domestic visitors last year.

Haikou, the capital city of Hainan is likely to be the next city to start the pratice.

For the moment, a total of 18 types of imported items are covered in the refund scheme, most of them are luxury goods, including jewelry, handicraft, watches, perfume and cosmetics. It is not known yet if more types will be included in the future.

For CRI, I'm Wangjing.