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Tourist tax refunds in the UAE have surged by 14.4% to reach 4.2 million.

UAE, Dubai
UAE, Dubai

The United Arab Emirates (UAE) stands out as a beacon of innovation and growth, particularly in the realm of tax refund transactions for tourists. The Federal Tax Authority (FTA) of the UAE has proudly announced a substantial 14.41% increase in tourist tax refund transactions for the year 2023. This notable rise reflects not only the UAE's increasing appeal as a global tourist destination but also the efficiency and effectiveness of its Value-Added Tax (VAT) refund system for tourists.

Since its inception in November 2018, the electronic VAT refund system has been at the forefront of facilitating a seamless shopping experience for international visitors. The system, lauded for its sophistication and user-friendly interface, has processed around 4.18 million transactions in 2023 alone, with a daily average of 11,460 transactions. This marks a significant milestone in the system's operation, showcasing the UAE's dedication to enhancing its tourism and retail sectors through technological advancements.

Khalid Ali Al Bustani, the Director-General of the FTA, has been a pivotal figure in the system's success, overseeing its development and implementation. Under his guidance, the electronic VAT refund system has not only met but exceeded expectations. Al Bustani's leadership reflects the UAE's broader goals of digital transformation and excellence in public service. The system's evolution is a testament to this, with daily transaction averages steadily increasing from 4,130 in 2020 to approximately 11,460 in 2023. This growth trajectory aligns with the resurgence of tourism in the UAE and the continuous improvements made to the VAT refund mechanism.

The electronic system's success is largely attributed to the digital linkage between the retail sector and the VAT refund system. This innovative approach facilitates the processing of electronic invoices, eliminating the need for paper-based transactions and thereby streamlining the shopping experience for tourists. By the end of 2023, over 16,480 stores across the UAE were integrated into this system. This expansion is a clear indication of the UAE's commitment to leveraging digital solutions to enhance competitiveness across all sectors, including tourism.

Moreover, the introduction of self-service VAT refund devices represents another leap forward in the authority's efforts to automate and simplify the refund process for departing tourists. With 85 devices now in operation across major malls, hotels, and departure points, the system ensures that tourists can reclaim their VAT within a mere two minutes. This efficiency is a cornerstone of the UAE's strategy to provide exceptional service to international visitors, reinforcing its position as a hospitable and forward-thinking destination.

The role of Planet, the service provider for the Tourist Tax Refund Scheme, is instrumental in the operational success of these self-service devices. Equipped with cutting-edge technology, these devices allow for the complete automation of the VAT refund process, with Planet's staff available to assist tourists when necessary. This collaborative effort between the FTA and its service provider exemplifies the UAE's approach to public-private partnerships in enhancing visitor experiences.

As the UAE continues to welcome tourists from around the world, the sustained growth in tax refund transactions speaks volumes about the country's ability to adapt and innovate. The electronic VAT refund system is more than just a mechanism for financial transactions; it is a symbol of the UAE's ambition to be at the forefront of digital excellence and service innovation. Through this system, the UAE not only boosts its tourism sector but also showcases its commitment to creating a seamless, efficient, and enjoyable experience for every visitor.

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