UAE: More than 14,000 tax refund requests from tourists processed per day in first half of 2024

Growth follows a boom in the tourism sector and an upgrade to the digital tax refund system

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Published: Mon 26 Aug 2024, 6:04 PM

The Federal Tax Authority (FTA) on Monday reported significant growth in the volume of transactions processed through the digital Value Added Tax (VAT) refund system for tourists in 2024, surging to 2.7 million in the first half of the year, up from 2.55 million requests recorded during the same period in 2023.

Th figures are based on the number of refund “Tax free Tag” issued by retail stores electronically linked to the system, and add up to a daily average of approximately 15,000 transactions, compared to 14,180 in the same period of 2023, marking an increase of 5.62 per cent.

In a statement, the Authority revealed that a total of 19.67 million digital tax refund requests from tourists have been processed between the system’s initial launch and the end of the first half of 2024 (H1 2024), compared to 14.54 million transactions recorded by the end of H1 2023 – a notable uptick of 35.25 per cent over a period of 12 months.

Over the course of one year (from June 30, 2023 to June 30, 2024), 5.13 million electronic tax refund requests from tourists were processed, marking a daily average of more than 14,000 transactions.

Khalid Ali Al Bustani, director-general of the FTA, said: “The significant increase in tax refund requests from tourists can be attributed to the substantial tourism boom the UAE is currently enjoying, which reflects the wise leadership’s vision to expand diversification policies and strengthen various sectors’ role and position within the economic system, including the vital and promising tourism industry.”

The FTA is adopting digital transformation plans to deliver advanced tax services, in line with government priorities and directives, and in an effort to contribute towards initiatives and transformational projects with effective procedures that accelerate service delivery, reduce paper consumption, and minimise the number of required documents.

The network of retail stores electronically linked to the tax refund for tourists scheme has expanded significantly across the country, exceeding 16,870 stores by the end of the first half of 2024, compared to nearly 15,610 by the end of H1 2023. This marks an increase of 8.07 per cent, adding 1,260 stores in one year (June 30, 2023 to June 30, 2024). The number of retail stores linked to the system has steadily increased over the past few years, from 10,260 stores at the end of 2020 to 13,880 at the end of 2021, rising to 15,240 by end of 2022, and then 16,480 by end of 2023.

There has also been a notable increase in the deployment of self-service kiosks, which allow tourists to process their tax refund requests in approximately two minutes per transaction. The total number of kiosks rose to 95 by end of H1 2024, compared to 79 by the end of the first half of 2023, adding 16 new devices and marking a significant increase of 20.25 per cent in one year (from 30 June 2023 to 30 June 2024). In the first six months of 2024, six new kiosks were added, compared to just one device added during the same period in 2023.

Planet, the company authorised by the FTA to operate the system, manages these kiosks, which are equipped with the necessary technology to allow for fully automated tax refund procedures. The devices are widely available across major shopping centres (malls) and hotels, as well as at all points of departure from the UAE.