The UAE's Cabinet decision to implement a system that returns VAT to tourists will strengthen the UAE’s role as a global tourist destination, according to the country's Federal Tax Authority (FTA), reports Arabian Business.
In a press statement, the FTA said that the Cabinet decision has set "clear standards branded with transparency and accuracy" in returning VAT refunds to tourists visiting the UAE from the beginning of October.
It revealed that the project to implement the refund is nearing its final preparation stages, where an advanced system will be put in place to corresponds with international best practices.
Hoteliers in the country have also welcomed the move. Government statistics show that the total contribution of the tourism sector to the UAE’s GDP reached 11.3% in 2017, equivalent to AED 154.1 billion ($41.9 billion).
FTA director general, Khalid Ali Al Bustani, said: “The system operator will be signing agreements with retailers to provide them with the necessary technology to connect with the FTA, as well as with airports, and land and sea ports of entry.
“Designated spaces will be provided where tourists can easily reclaim taxes. The digital system determines the taxes that are eligible for a refund and then reimburse tourists. This complements the Government’s commitment to implementing the UAE tax system and ensuring that it is in line with global standards.”
He said the Authority conducted extensive studies to formulate an optimal tax refund system, discussing the results of this research in successive board meetings before finally contracting with the international system operator.