UAE Sees Surge In Tourist VAT Refund Requests In First Half Of 2024

The Federal Tax Authority (FTA) reported a significant rise in digital VAT refund transactions for tourists in 2024. The first half of the year saw 2.7 million transactions, up from 2.55 million during the same period in 2023. This represents a daily average of about 15,000 transactions, compared to 14,180 last year, marking a 5.62 percent increase.

The FTA highlighted that the network of retail stores linked to the Tax Refund for Tourists Scheme has grown substantially. By the end of H1 2024, over 16,870 stores were connected to the system, up from nearly 15,610 by H1 2023. This marks an increase of 8.07 percent within one year.

Khalid Ali Al Bustani, Director-General of the FTA, attributed this growth to the UAE's tourism boom and leadership's vision for economic diversification. He stated, "The significant increase in tax refund requests from tourists can be attributed to the substantial tourism boom the UAE is currently enjoying."

Al Bustani also noted continuous upgrades to the digital tax refund system as a key factor in this surge. He added that the system offers fully digital procedures for processing invoices issued by registered retail outlets. This advanced electronic link between sellers and tourists ensures eligibility for tax refunds according to relevant legislation.

The FTA revealed that since its launch until H1 2024, a total of 19.67 million digital tax refund requests have been processed. This is a notable increase from the 14.54 million transactions recorded by H1 2023, reflecting a growth of 35.25 percent over twelve months.

Self-Service Kiosks

The number of self-service kiosks has also risen significantly. By H1 2024, there were 95 kiosks available compared to 79 by H1 2023, marking a growth of 20.25 percent within one year. These kiosks allow tourists to process their tax refund requests in approximately two minutes per transaction.

The FTA explained that Planet manages these kiosks equipped with technology for fully automated tax refund procedures. These devices are widely available across major shopping centres and hotels and at all points of departure from the UAE.

Digital Transformation Initiatives

The Authority is committed to ambitious digital transformation plans aligned with government priorities and directives. These initiatives aim to deliver advanced tax services efficiently while reducing paper consumption and minimising required documents.

Between June 30, 2023, and June 30, 2024, over one year, the FTA processed around 5.13 million electronic tax refund requests from tourists. This equates to more than an average of over 14,000 transactions daily.

The FTA emphasised that these measures aim to make a tangible impact quickly while meeting Zero Government Bureaucracy Programme requirements and providing next-generation proactive services.

This comprehensive approach positions UAE Government services among the best globally while supporting various sectors' roles within the economic system.

With inputs from WAM