The Federal Tax Authority (FTA) has reported a substantial surge 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 reached 2.7 million in the first half of the year, up from 2.55 million requests recorded during the same period in 2023, indicating a growth of 5.62 percent.
According to the FTA’s press statement, 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 remarkable increase of 35.25 percent over a period of 12 months.
Tourism boom
Khalid Ali Al Bustani, director-general of the FTA, attributed this surge to the substantial tourism boom the UAE is currently experiencing, which reflects the country’s leadership’s vision to diversify the economy and strengthen various sectors, including the vital and promising tourism industry.
The FTA also highlighted the continuous upgrades and enhancements made to the digital tax refund system for tourists, which is considered the most advanced of its kind in the world. The system offers 100 percent digital procedures, allowing for the issuance, sending, modification, and storage of electronic invoices between retail outlets, tourists, and the system itself, with built-in verification procedures to ensure eligibility for tax refunds.
Read more: UAE nationals receive $691.53 million in home construction tax refunds from FTA
Continuous upgrades to the digital refund system
Furthermore, the FTA noted that 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 – an increase of 8.07 percent.
The Authority also reported 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 the end of H1 2024, compared to 79 by the end of the first half of 2023, marking a significant increase of 20.25 percent in one year.
Overall, the FTA’s data highlights the remarkable growth and continued advancements in the digital VAT refund system for tourists, which is contributing to the UAE’s thriving tourism industry and its ongoing efforts to enhance government services through digital transformation initiatives.
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