Overseas tourists may be able to claim tax refunds at shopping malls in Beijing as the city strives to boost inbound tourism.
Local authorities are working on a plan, according to the Beijing Tourism Development Commission.
Zhou Zhengyu, head of the commission, said at a news conference on Friday that the policy is likely to be launched later this year. Authorities will also try to make visa applications easier for foreign tourists.
No details of the tax reimbursement plan have been released.
Dai Bin, a professor of tourism at Beijing International Studies University, said the policy will help to increase spending by overseas visitors.
He expects the tax refund rate to be set at 5 per cent or higher.
Official figures show that shopping accounts for 27.6 per cent of total spending by tourists in Beijing, followed by transport at 26.9 per cent, accommodation at 16.9 per cent and dining at 7.3 per cent.
Wang Hongcun, head of the general office of the Beijing commerce commission, said the agency will further promote traditional brands in Beijing to attract more overseas consumers.
"Shopping and dining by tourists in Beijing generated more than 203 billion yuan ($33.4 billion) last year, accounting for more than half of total tourism income," he said.
Yang Jinsong, a professor of international tourism at the China Tourism Academy, suggested the capital learn a lesson from Hainan province, where the tax reimbursement scheme was first piloted. However, it received a lukewarm response because of a shortage of products and a lack of promotion.
Aki Takahashi, 29, from Japan, who came to Beijing for a vacation in 2012, said the tax reimbursement might help generate more revenue but not necessarily more tourists.
"Shopping is not a must in China for me and my family. Also, you can always buy duty-free products at the airport terminals," he said.
Unlike Hainan, the tax refund in Beijing will only apply to foreign visitors, an insider told China Daily.
Figures from the Beijing commission show that the city saw a sharp fall in inbound tourism in 2013, with more than 4.5 million visitors arriving, down by 10.1 per cent from the previous year.
It said the number of foreign tourists accounted for 1.79 per cent of all tourists arriving in the capital last year.
Foreign tourists' per capita spending in Beijing last year rose to $1,065, an increase of 3.6 per cent.
Average spending on shopping per stay was $252.40, with each stay averaging 4.22 days.
"Foreign tourists, although accounting for only 1.79 per cent of the total, contributed 7.49 per cent of tourism revenue last year," Yang said.
While tourist arrivals from Asia dropped by 15.3 per cent and those from Europe by 9.7 per cent, the proportion coming to Beijing from Africa grew by 9.4 per cent.
The United States was the biggest source of foreign tourists in Beijing, with 747,000 visitors arriving last year, followed by 369,800 from South Korea.
About 249,000 Japanese visited Beijing, a fall of 43.1 per cent from the previous year. The decline was mainly because of worsening relations between the two countries over territorial disputes.
Compared with other regions in China, Beijing was among the most severely hit by the decline in inbound tourism.
Statistics from the National Tourism Administration show that China received more than 55.68 million overnight inbound visits last year, a fall of 3.5 per cent.
The Beijing commission blamed a weak global economy, a stronger yuan, visa obstacles and heavy pollution in Beijing for the drop in foreign tourists.
In the latter half of 2013, with the city's air quality improving, there was "positive growth" in the number of inbound tourists, it said.
Commission chief Zhou said that despite the challenges, Beijing will witness a better inbound tourism performance.
The capital will further promote its image in traditional tourist origin countries, including those in Europe, while further tapping emerging markets like Australia and India, he said.
It is aiming for a 9 per cent growth in tourists and revenue in 2014.