Wanlian Securities: "Buy now, Return anytime" promotion launched to stimulate inbound consumer activity.

Wanlian Securities released a research report stating that the comprehensive promotion of the "buy-now-refund-now" service measures for departure tax refunds is expected to effectively enhance the convenience of overseas tourists' consumption upon entry, enhance the attractiveness and influence of China's international tourism in the current context of intense tariff wars, and promote the development of the inbound tourism industry. It is recommended to focus on travel agencies and duty-free companies in the retail and social service sectors. Event: On April 8th, the State Administration of Taxation issued a notice on the promotion of the "buy-now-refund-now" service measures for overseas tourist shopping departure tax refunds, clarifying the main contents, processing procedures, and implementation time of the departure tax refund "buy-now-refund-now" service measures, expanding this service from pilot projects in multiple locations to nationwide. Key points from Wanlian Securities: Policy upgrades stimulate the consumption vitality of overseas tourists The departure tax refund policy for overseas tourists refers to the policy of refunding value-added tax on goods purchased from tax refund shops when leaving the departure port, which has been implemented in eligible regions nationwide since 2015. The tax refund rate for the departure tax refund policy deducts the handling fee from the VAT rate. According to the 2019 announcement on policy measures related to deepening value-added tax reforms by the Ministry of Finance, the State Administration of Taxation, and the General Administration of Customs, the tax refund rate for items purchased by overseas tourists at 13% VAT rate is 11%, and for items at 9% VAT rate it is 8%. The "buy-now-refund-now" service is an upgrade and optimization of the departure tax refund policy. When overseas tourists purchase tax refundable goods in "buy-now-refund-now" shops, sign an agreement, and authorize their credit card, they can receive an equivalent amount of RMB on-site at the store. After passing through customs during departure inspection, the credit card pre-authorization is released to complete the departure tax refund process. The "buy-now-refund-now" service brings the tax refund process forward to the shopping stage, making the benefits of the departure tax refund policy more visible and allowing overseas tourists to use the refund for further consumption, amplifying the multiplier effect and increasing the shopping per capita of inbound foreign tourists. After undergoing pilot projects in multiple locations, the "buy-now-refund-now" service has shown significant effects. In 2019, the service began as a pilot project in Shanghai and Beijing, providing overseas tourists with more convenient and diversified tax refund options. After a temporary halt during the pandemic, from 2023-2024, the State Administration of Taxation resumed pilot projects in Guangzhou, Hangzhou, Shenzhen, Chengdu, and other cities, achieving significant results. According to data announced at a press conference by the State Administration of Taxation, in 2024, the number of overseas tourists who processed departure tax refunds, the sales amount of tax-refundable goods, and the amount of tax refunds increased by 2.3 times, 1.2 times, and 1.3 times respectively compared to the previous year, effectively driving inbound tourist consumption and laying a solid foundation for the nationwide promotion of the departure tax refund "buy-now-refund-now" service. Risk factors: 1. Unexpected changes in U.S. tariff policies and retaliatory policies of various countries; 2. Intensifying risks of geopolitical conflicts; 3. Risks of macroeconomic fluctuations.