Saudi Arabia to launch VAT refund for tourists next year
Initiative to promote tourism and shopping; Kingdom aims to attract 127 million visitors
Cairo: Saudi Arabia will launch a value-added tax (VAT) refund system for tourists next year as part of its efforts to attract more foreign visitors. The Saudi Zakat, Tax and Customs Authority will oversee the implementation of this system, which aims to simplify tax compliance, according to the Saudi news portal Sabq.
The kingdom aims to attract 127 million visitors by the end of 2025, with tourism revenue expected to reach SR346.6 billion. This growth is seen as a significant contribution to the national economy, increasing non-oil income and boosting demand for private sector institutions.
The VAT refund system will allow foreign tourists to reclaim the VAT they paid on purchases during their visits to Saudi Arabia. The initiative is designed to encourage tourism and make the shopping experience more appealing, the report stated.
In recent years, Saudi Arabia has introduced a range of facilities to attract more international tourists. These include the issuance of tourist visas on arrival or online for citizens of several nationalities under a system launched in 2019.
Last year, Saudi Arabia introduced a four-day transit visa, which allows holders to perform Umrah or a minor pilgrimage at the Grand Mosque in Mecca, visit the Prophet Mohammad’s Mosque in Medina, and attend various events across the kingdom.
The number of tourists to Saudi Arabia surged to more than 100 million in 2023. Earlier this year, Saudi Tourism Minister Ahmed Al Khateeb announced that the country had achieved its 2023 tourism target, with 77 million local visitors and 27 million international arrivals.
Saudi Arabia is aiming to be among the world’s top 10 tourist destinations.