The tourism sector receives the VAT refund move with open arms

Published on : Thursday, July 12, 2018

indexThe tourism industry and retailers both have responded positively to the new statement that UAE visitors will be in a position to claim back any value added tax or VAT they are charged.


The UAE cabinet on Wednesday settled to put in place a system that will permit the visitors to get refunds on the five percent tax they pay on goods, starting from the fourth quarter of this year.


When questioned by Gulf News, retail analysts highlighted few uncertainties that the move would be enough to conquer few key structural challenges of the retail sector like high rents and an oversupply of mall space.


From the viewpoint of the government, however, permitting tourists to reclaim their VAT brings the UAE in line with international standards.


Dubai and Abu Dhabi tourism authorities explained that they welcomed the news and the boost to tourism that it will bring.


“The UAE’s leadership has long recognised the importance of tourism to the national economy, and this move to implement a value added tax refund system for tourists will ensure the sector’s competitiveness globally and drive further growth in its GDP contribution,” said Helal Saeed Al Merri, director-general of Dubai Tourism, adding that as retail continued to be a key reason many tourists came to Dubai, he expected “to see significant numbers of tourists taking advantage of their shopping opportunities in Dubai”.


Abu Dhabi’s tourism board, for their part, mentioned that the move would additionally fortify its strategy of positioning Abu Dhabi as a visitor-friendly destination.


The country’s two largest home-grown hotel groups also expressed support for the decision.


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