(Yicai) April 27 -- China’s 'instant tax rebate' service for departing visitors has seen refund volumes surge more than nine times since its launch in April last year, as the scheme drives stronger consumption by overseas travelers, according to the latest data.

The number of people nationwide using the service has soared 12.9-fold over the past year, while both tax refund sales and refund amounts have increased 9.3 times, according to figures from the State Taxation Administration.

China has long had a tax refund system in place to boost consumption. But foreign visitors who bought eligible goods at stores in regions covered by the policy were required to claim their value-added tax refunds, set at 13 percent, at departure points when leaving the country.

Recently, some regions began piloting an ‘instant tax rebate’ system for visitors leaving the country. Under this program, overseas tourists shopping at participating stores can complete a credit card pre-authorization and immediately receive a cash advance equal to the expected refund.

Some areas have been exploring ways to make the process smoother. Beijing, for example, has launched a city-wide instant refund service that removes location restrictions, allowing travelers to shop at any tax refund store in the city and then choose a nearby refund point. And southwestern Sichuan province has put in place a QR-code based 'scan and refund' system that lets foreign tourists upload their tax refund application forms, identification documents and receipts, enabling them to quickly complete the refund process and receive the refund.

China has over 8,000 tax refund shops that offer the instant refund service, more than double the number a year ago when the service first started. Some overseas tourists are even using the refunded cash to continue shopping straight away.

The rollout of the instant tax rebate service for departing visitors has boosted inbound consumption and is an important step in improving China’s international business environment, said Fan Yong, dean of the School of Public Finance and Taxation at Central University of Finance and Economics. The sharp growth in tax refund sales and the amount of tax refunds is not only due to policy improvements, but also to a significant rise in the number of inbound travelers.

The number of foreigners entering the country surged 26.4 percent last year from the year before to 82 million people, 30 million of which entered the country under the visa waiver program, according to the data from the National Immigration Administration. In the first quarter, 21.3 million foreign nationals entered or exited the country, a year-on-year jump of 22.3 percent.

Editor: Kim Taylor