Photo/Illutration The Hitsujigaoka observation hill is a popular tourist destination in Sapporo. (Asahi Shimbun file photo)

The Hokkaido government is pushing ahead with an ordinance to impose a lodging tax on tourists despite strong local opposition from around Japan’s northern main island.

The ordinance will be submitted to the regular Hokkaido prefectural assembly session that opens on Nov. 26. Under the plan, the new tax will be levied starting in fiscal 2026.

The tax will be a tiered flat-rate system, ranging from 100 yen to 500 yen ($0.64 to $3.22) per guest per night, depending on the room rate.

The tax is expected to generate annual revenue of 4.5 billion yen, which will be allotted to Hokkaido’s tourism budget.

Hokkaido Governor Naomichi Suzuki in July announced his intention to introduce the lodging tax. He had presented the concept of the new tax at a prefectural assembly session in June.

He also exchanged ideas with four economic organizations in October to pave the way for the new levy.

However, the Hokkaido town of Kutchan, which introduced its own lodging tax system in fiscal 2019, has objected to the idea of a prefecture-wide tax system.

The town already imposes a 2 percent tax on guests, meaning that hotels and Japanese-style inns in Kutchan would have to bear an excessive burden in collecting both taxes.

The Kutchan government asked the prefecture to allow municipal governments to choose between a flat-rate tax system and a percentage-based system.

Representatives from the Kutchan and Hokkaido governments, as well as the internal affairs ministry, discussed the issue in mid-October, but no conclusion was reached.

The town’s tourism association asked the prefecture to continue discussions, but Hokkaido refused further talks and announced on Nov. 19 that it would submit the tax ordinance to the assembly.

“We decided it would be difficult to reach an agreement after holding so many discussions,” Toshihiro Odagiri, a senior Hokkaido government official in charge of promoting tourism in the prefecture, said at a news conference. “But we will continue to discuss measures to alleviate the burden on the accommodation business owners.”

Kutchan town’s tourism association voiced disappointment with Hokkaido’s move.

“It is so regrettable that the outcome may harm trust between the town and the prefecture,” an association official said.

One reason behind Hokkaido’s push for a lodging tax is that many municipalities in Hokkaido, such as Sapporo and Hakodate, are considering introducing their own lodging tax systems.

If Hokkaido’s tax is imposed after the municipal taxes, the operations of accommodation businesses in those areas could be thrown into confusion.

Another reason for Hokkaido’s push is that it wants to cash in on the surging numbers of foreign tourists since the end of the COVID-19 pandemic.

An increasing number of local governments around Japan that host popular tourist sites are planning lodging taxes.

The internal affairs ministry said 13 municipal governments across the country have introduced lodging taxes or have decided to do so.

Many other local voices in Hokkaido are against the prefecture’s tax plan.

“Each municipality has different countermeasures against overtourism. Only the municipalities know the actual situation,” said Hiroyuki Kakuwa, mayor of the tourist-popular town of Biei, who is considering introducing a lodging tax system.

“It is impossible for the prefecture to take unified measures,” he said.

The introduction of a non-statutory purpose tax requires approval from the internal affairs minister.

“Hokkaido’s proposed ordinance would close the door for municipalities to choose a percentage-based lodging tax, which infringes on the taxation autonomy of smaller local governments,” the Kutchan town government said.

Even if the Hokkaido assembly approves the lodging tax ordinance, it is uncertain whether municipalities and related organizations will readily accept it.

(This article was written by Osamu Hiura and Jun Hasegawa.)

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