Hokkaido Communities Explore Local Taxation for Tourists

Sapporo - As the winter sports season gains momentum, Hokkaido is experiencing a surge in visitors ranging from skiers to those seeking a winter getaway. This influx has brought to light the challenges that local governments face in providing adequate services for tourists. Many regions in Hokkaido, which are grappling with declining populations and reduced tax revenues, are now contemplating the implementation of a local accommodation tax to help finance necessary services.

The prefecture of Hokkaido and the city of Sapporo have announced plans to introduce a lodging tax starting in April 2026. In response, several towns and villages in the region have initiated discussions regarding the introduction of similar taxes. Currently, two areas--Niseko and Kutchan--have already established levies on accommodation services for visitors.

The Kutchan accommodation tax was first enacted in November 2019 and has yielded significant revenue for local initiatives. In the fiscal year 2023, the tax generated approximately ¥200 million, which has been allocated to various tourism infrastructure projects. For the upcoming 2024 fiscal year, it is projected that the levy will generate around ¥260 million, demonstrating the potential financial benefits of such a tax for local communities.

The ongoing discussions around accommodation taxation reflect a growing recognition among Hokkaido's municipalities of the need to balance the economic benefits of tourism with the sustainability of local services. As communities consider these measures, they aim to enhance infrastructure while addressing the challenges posed by an increasing number of visitors.