Hainan tax-free store attracts a crowd excited to splurge

( English.news.cn )

Updated: 2011-05-19

A pilot tax-rebate program in China's southernmost Hainan Province proved to be a huge success as first-day visits to the tax-free store exceeded expectations.

Sanya's only tax-free store received over 15,000 customers after doors opened at 10:10 a.m. on April 20th, said Teng Rui, the store's deputy general manager.

"The number of customers exceeded our expectations, and our statistics show that a total of 5,619 purchases were made," Teng said.

Tourists to the tropical island resort town have shown strong interest in the pilot program, which is modeled on similar schemes on the Republic of Korea's Jeju Island and Okinawa, Japan.

According to the program's policies, tourists visiting the island and local residents can both enjoy duty exemption on certain imported commodities worth no more than 5,000 yuan (765 U.S. dollars) before flying to other destinations in China.

Within minutes of the tax-free store's opening, counters offering cosmetics and perfume products were nearly bare.

"Cosmetics here are much cheaper than in other places, and we are lucky to catch the opportunities," said Yang Peng, a man from central China's Hubei Province travelling with his wife.

After deducting customs duties, import value added taxes and consumer taxes, the store's commodities are usually 10 to 35 percent less expensive than in other stores, Teng Rui told reporters.

The tax-free bonus enabled many tourists to splurge on luxury items, which some prefer to buy in Hong Kong or abroad to avoid customs duties.

By 10:30 a.m., the counter of Gucci, an international luxury goods brand, was limiting entry to just 20 customers at a time in an effort to maintain order.

"It's tax free, but people are so crazy that it seems as if commodities here cost nothing," a tourist said without giving his name.

Some other tourists, however, complained that the 5,000-yuan cap was too low.

"I had intended to buy a watch, which has a price tag of about 4,000 yuan. But, in that case, I won't be able to buy cosmetics for my wife. So I gave up," said Zhao Liang, a tourist from Xi'an, capital of northwestern Chian's Shaanxi Province.

Wednesday's launch of the tax-rebate program is part of the provincial government's efforts to build the island into an international tourism and shopping destination.

The island inaugurated a similar program targeting foreign tourists on January 1.