The Federal Tax Authority (FTA) has reported a significant increase in the volume of transactions processed through the digital Value Added Tax (VAT) refund system for tourists in 2024. The number of refund “Tax free Tag” issued by retail stores electronically linked to the system has surged to 2.7 million in the first half of the year, up from 2.55 million requests recorded during the same period in 2023. This marks an increase of 5.62 per cent, with a daily average of approximately 15,000 transactions compared to 14,180 in 2023.
The Authority revealed that a total of 19.67 million digital tax refund requests from tourists have been processed between the system’s launch and the end of the first half of 2024, compared to 14.54 million transactions recorded by the end of H1 2023, showing a notable uptick of 35.25 per cent over 12 months. Khalid Ali Al Bustani, director-general of the FTA, attributes the increase in tax refund requests to the substantial tourism boom the UAE is currently experiencing and the government’s efforts to strengthen the tourism industry.
The FTA is focusing on digital transformation plans to provide advanced tax services in line with government priorities and directives. They aim to contribute to initiatives and projects with efficient procedures that accelerate service delivery, reduce paper consumption, and minimize the number of required documents. The network of retail stores linked to the tax refund for tourists scheme has expanded significantly to over 16,870 stores by the end of H1 2024, an increase of 8.07 per cent from H1 2023, adding 1,260 stores in one year.
There has also been a notable increase in the deployment of self-service kiosks, allowing tourists to process their tax refund requests in approximately two minutes per transaction. The total number of kiosks rose to 95 by the end of H1 2024, compared to 79 by the end of H1 2023, with 16 new devices added, marking a 20.25 per cent increase. Planet, the company authorized by the FTA to operate the system, manages these kiosks, which are available in major shopping centers and hotels, as well as at all points of departure from the UAE.
The growth in tax refund requests from tourists reflects the UAE’s expanding diversification policies and strengthened role in various sectors. The country’s tourism industry is a vital and promising sector that is benefiting from the FTA’s efforts to provide efficient services and streamline processes. With the continuous expansion of the retail store network and self-service kiosks, tourists visiting the UAE can easily process their tax refund requests and experience a hassle-free shopping experience.
In conclusion, the increase in digital tax refund transactions for tourists in the UAE demonstrates the country’s commitment to enhancing its tourism industry and providing a seamless experience for visitors. The FTA’s focus on digital transformation and efficient service delivery has resulted in significant growth in the number of transactions processed through the VAT refund system. Continued efforts to expand the network of retail stores and self-service kiosks will further improve the overall tourist experience in the UAE and contribute to the country’s economic diversification policies.
