TOKYO - Japan plans to revise its duty-free system for foreign visitors starting in the latter half of fiscal 2026, addressing concerns over misuse of the current framework, Kyodo News cited sources on Wednesday.

Currently, foreign tourists are exempt from Japan's 10 percent consumption tax on purchases exceeding 5,000 yen (about $33) if the goods are intended for use outside the country.

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Under the proposed changes, consumption tax exemptions provided at the point of sale will instead be reimbursed after tourists return to their home countries, according to the report.

The revisions aim to combat the illicit resale of duty-free goods in Japan, a problem identified by the government under Prime Minister Shigeru Ishiba. The Ishiba administration intends to include the revisions in its tax reform plan, set for approval in December.

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To enforce the new rules, devices to track and verify the purchase history of duty-free goods will be installed at airports and ports nationwide. Additionally, foreign visitors will lose eligibility for tax exemptions if they mail duty-free items from Japanese post offices, the report noted.