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Cross-Border Shopping, E-Commerce, and Consumption Tax Revenues in Japan

Author

Listed:
  • Yoshimi Adachi

    (Graduate School of Humanities, Konan University)

  • Hikaru Ogawa

    (Faculty of Economics, The University of Tokyo)

Abstract

This study estimates the impact of cross-border consumption and e-commerce on local consumption tax revenues for Japanese municipalities. Descriptive statistics reveal that, in 2019, expenditure through e-commerce accounts for 2.5% of household consumption expenditures, 9.1% in other municipalities in the same prefecture, and 6.1% in other prefectures, all of which are higher than the values five years ago. The main findings obtained from the panel data analysis are as follows: First, local consumption tax revenue per capita is significantly lower by approximately 0.3% in municipalities with 10% more consumption spending outside the municipalities. Second, the revision of rules for allocating consumption tax revenues in 2018 has the effect of favoring municipalities facing a consumption drain with a large population but low in-store sales.

Suggested Citation

  • Yoshimi Adachi & Hikaru Ogawa, 2022. "Cross-Border Shopping, E-Commerce, and Consumption Tax Revenues in Japan," CIRJE F-Series CIRJE-F-1204, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2022cf1204
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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