UAE witnesses 14.4% increase in tourist tax refunds to 4.2 million

UAE tax authorities have noted a sustained uptick in tourist tax rebates within the nation. The Federal Tax Authority (FTA) has revealed a 14.41 percent surge in tax refund transactions for tourists, reaching a total of 4.18 million transactions throughout 2023, averaging 11,460 transactions daily.

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Khalid Ali Al Bustani, the Director-General of FTA, highlighted the electronic VAT refund system's surpassing performance in recent years, showcasing a remarkable escalation in tax refund transactions.

The system was launched in November 2018 and handled almost 14 million electronic transactions for tourist tax refunds by the end of the previous year, according to FTA statistics.

Over the last four years, the average number of electronic transactions processed for tourist tax refunds has been steadily increasing, according to Al Bustani. In 2020, there were 4,130 daily transactions; in 2021, there were around 7,390; and in 2022, there was a dramatic increase to about 10,020. In 2023, this pattern persisted, with an average of around 11,460 tax refund transactions per day for visitors.

Al Bustani remarked on the tourism rebound experienced by the UAE and the ongoing enhancements made by the Authority to the electronic VAT refund system. The total annual number of electronic transactions for tourist tax refunds has shown continual growth in recent years, escalating from 1.51 million transactions in 2020 to 2.7 million transactions in 2021, marking a 78.54 percent increase. This growth persisted, reaching 3.66 million transactions in 2022, a 35.44 percent surge, and further increasing to 4.18 million transactions in 2023, reflecting a 14.41 percent rise.

Regarding the digital linkage of retail systems with the VAT refund system for tourists, Al Bustani elucidated its pivotal role in the significant strides made during the recent period. The digital system, launched in 2022, represents the latest technology of its kind worldwide.

The electronically linked retail base to the tourist VAT refund system saw substantial expansion nationwide, surpassing 16,480 stores by the previous year's end, a 60.62 percent increase compared to around 10,260 stores in 2020. This expansion aligns with the government's digital strategy for smart service transformation, focusing on proactive and innovative services to facilitate transactions with efficiency and convenience. Users have lauded the system for its user-friendly interface and swift refund procedures for eligible tourists.

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