UAE tax authorities have announced a continual increase in tourist tax refunds within the nation.
The Federal Tax Authority (FTA) has revealed a 14.41% surge in tax refund transactions for tourists, reaching a total of 4.18 million transactions in 2023, averaging 11,460 transactions daily.
Khalid Ali Al Bustani, Director-General of FTA, highlighted the surpassing performance of the electronic system for refunding value-added tax to tourists, with a notable uptick in tax refund transactions.
Tourist tax refund transactions in the UAE
Since the system’s launch in November 2018 until the end of the previous year, the FTA has processed approximately 14 million electronic transactions for tax refunds to tourists.
He observed that the daily average of electronic transactions executed for tax refunds to tourists has consistently risen over the past four years, escalating from 4,130 transactions per day in 2020 to about 7,390 transactions daily in 2021, and notably to about 10,020 transactions daily in 2022, continuing the upward trend to about 11,460 transactions daily in 2023.
Al Bustani commented: “With the UAE’s tourism resurgence and the ongoing enhancements to the Authority’s electronic system for VAT refunds to tourists, the total annual number of electronic transactions for tax refunds to tourists has seen continuous growth in recent years, climbing from 1.51 million transactions in 2020 to 2.7 million transactions in 2021, marking a 78.54% increase.”
“The ascent persisted to 3.66 million transactions in 2022, recording a 35.44% increase.”
“It further escalated to 4.18 million transactions in 2023, registering a 14.41% rise.”
He remarked: “The digital system primarily relies on handling electronic invoices issued by registered retailers (point of sale) with the Authority’s system instead of traditional paper invoices, through electronic linkage between these outlets and the system, facilitating issuance, transmission, modification, and storage of invoices electronically between the seller, the tourist (buyer), and the system, in alignment with the highest standards, to bolster the country’s competitiveness across all sectors, including tourism.”
He noted the significant expansion of the electronically linked retail network to the tourist VAT refund system nationwide in recent years, exceeding a total of 16,480 stores by the end of the preceding year, marking a total increase of 60.62% compared to around 10,260 stores by the end of 2020.
He highlighted that the expansion of the digital tourist VAT refund system in the UAE aligns with the government’s digital strategy for smart service transformation, according to Arabian Business.
The system prioritises proactive and innovative services aiming to fulfil user expectations by streamlining transactions with efficiency and speed.
Users highly commend the system for its user-friendly interface and swift refund processes for eligible tourists.
Al Bustani reiterated the Authority’s dedication to deploying numerous self-service devices enabling fully automated tourist VAT refund procedures upon their departure from the country, completing the process in approximately two minutes.
He noted that the current count of self-service VAT refund devices is 85, compared to 71 devices by the end of 2020, representing a 19.72% increase.