FTA reports 2.7m tax refund requests from tourists processed in H1 2024

The Federal Tax Authority (FTA) asserted there has been considerable 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.

The 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 percent.

In a press statement issued on Monday, 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 percent over a period of 12 months.

The FTA indicated that over the course of one year (from 30th June 2023 to 30th June 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.”

“Other key factors that led the surge in tax refund requests from tourists include the continuous upgrades that the Federal Tax Authority has implemented in to enhance the digital tax refund system for tourists.” Al Bustani added.

“The system is the most advanced of its kind in the world and offers 100 percent digital procedures to process digital invoices issued from retail outlets registered in the system, replacing traditional paper invoices, using an advanced electronic link between these outlets and the system. This allows for issuing, sending, modifying, and storing invoices electronically between the seller, the tourist making the purchase, and the system, which also offers programmed built-in verification procedures to ensure eligibility for tax refunds according to the relevant tax legislation.”

The FTA Director-General went on to explain that the Authority is adopting ambitious 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. These and various other measures aim to make a tangible impact in a short period of time, meeting requirements of the Zero Government Bureaucracy Programme, providing next-generation proactive services, and positioning UAE Government services as the best in the world.

The Federal Tax Authority 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. This marks an increase of 8.07 percent, adding 1,260 stores in one year (30 June 2023 to 30 June 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.

The Authority added that 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 percent 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.

The FTA explained that Planet, the company authorised by the Authority 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.The 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 percent.

WAM