UAE Tourist Tax Refunds Surge By 14.41% To 4.18 Million In 2023, Reveals FTA

The Federal Tax Authority (FTA) of the United Arab Emirates has reported a notable increase in the volume of tax refund transactions for tourists, marking a 14.41 percent rise in 2023, with a total of 4.18 million transactions. This surge reflects a daily average of 11,460 transactions, according to Khalid Ali Al Bustani, Director-General of the FTA. Speaking to the Emirates News Agency (WAM), Al Bustani highlighted the success of the electronic system for refunding value-added tax (VAT) to tourists, which has seen significant growth since its inception in November 2018.

Since the launch of the VAT refund system for tourists, approximately 14 million electronic transactions have been processed up to the end of the previous year. The daily average of these transactions has shown consistent growth over the past four years, underscoring the system's efficiency and the increasing number of tourists availing of this service.

The FTA's commitment to enhancing the VAT refund system is evident in the continuous development and expansion of its digital infrastructure. Al Bustani revealed that the electronic linkage of retail systems with the digital VAT refund system is a critical factor in its success. This innovative approach, launched in 2022, positions the UAE's system as one of the most advanced globally. It enables electronic invoices to be issued, sent, modified, and stored directly between retailers and the system, streamlining the process for both sellers and tourists.

The expansion of electronically linked retail outlets has been significant, with more than 16,480 stores connected to the system by the end of last year. This represents a 60.62 percent increase from around 10,260 stores at the end of 2020. The growth aligns with the UAE government's digital strategy for smart service transformation and aims to enhance competitiveness across all sectors, including tourism.

Al Bustani also emphasized the deployment of self-service devices for processing tourist VAT refunds. The number of these devices has increased to 85 from 71 at the end of 2020, marking a 19.72 percent rise. These devices are strategically located in major commercial centres, hotels, and tourist departure points across the country. Managed by Planet, the authorized service provider for the Tourist Tax Refund Scheme, these devices offer an automated refund process that can be completed in approximately two minutes.

The FTA's efforts to streamline VAT refunds for tourists through digital innovation and expansion reflect its commitment to improving service delivery and enhancing the UAE's appeal as a tourist destination. The authority's focus on user-friendly interfaces and quick refund procedures has been well-received by users, contributing to an overall positive experience for tourists visiting the country.

With inputs from WAM