The number of applications for electronic value added tax refund from tourists more than doubled in the second half of 2019, as the volume of refund claims continue to rise steadily since the Federal Tax Authority rolled out the service in November 2018.
The total number increased to 3.2 million application by the end of 2019, compared to about 1.52 million received at the end of June, according to FTA data released on Saturday.
"All indicators confirm that the electronic VAT refund system for tourists is achieving steady success due to its ease of use and speed of delivery,” Khalid Al Bustani, director general of the FTA, said.
“The system has become an important tool for promoting the UAE's tourism sector .... expand economic diversification, and empower various sectors of the UAE economy,” Mr Al Bustani said.
The number of retail outlets across the UAE connected electronically to the FTA's system has also risen to 12,310. The number of self-service kiosks to recover VAT by tourists, before they make an exit from the country has also risen from 29 in July to 52 kiosks currently.
The FTA has authorised Planet, an international payments service provider, to operate its fully automated kiosks. Planet employees are also present at the self-service kiosks to assist tourists, if necessary.
The tourists qualified to claim refund for the VAT, can receive it within a year from the date of leaving the UAE, if they are not able to receive an immediate refund before their departure, provided they have completed the refund procedures before exiting the country, according to the FTA.
The number of VAT-registered private sector businesses has also risen to around 312,000 through individual registration or as tax groups, Mr Al Bustani noted.
The UAE introduced the 5 per cent levy of VAT on January 1, 2018 on most supplied goods and services. The tax system has achieved several of its main objectives, starting with the diversification of national income, while maintaining a sustainable environment and integrated infrastructure in the UAE, the second-biggest Arab economy.
All indicators underline the UAE’s success in developing its tax system in just two years, which has surpassed many implemented by some of the developed countries, according to Mr Al Bustani.
“The fully electronic VAT system encouraged businesses to seek voluntary compliance by offering seamless and simple procedures that ensure transparency and reliability.”
The FTA, through its updated website, launched a virtual assistant feature - an AI assistant that automatically queries by regarding tax procedures and legislation, offering taxable persons a wider range of educational options.
The number of tax clarifications provided by the FTA also increased to around 464 in 2019, compared to 120 special explanations at the end of 2018, with 445 clarifications provided for specific cases and 19 public clarifications that aim to boost awareness and voluntary tax compliance rates, according to the statement.
The FTA, which introduced the VAT refund mechanism for foreign businesses in April last year, said the value of those claims has reached Dh28.7 million.