Enhancing the Tourism Experience with VAT Refunds
Saudi Arabia has announced the launch of a Value Added Tax (VAT) refund system for tourists starting in 2025, as highlighted in the Kingdom's recent budget announcement for the upcoming fiscal year. The program, overseen by the Zakat, Tax, and Customs Authority, aims to simplify tax compliance and enhance the travel experience for visitors.
This initiative reinforces Saudi Arabia's commitment to making the Kingdom more attractive to international travelers, aligning with its ambitious tourism goals under the National Tourism Strategy.
Ambitious Tourism Goals for 2025
The Kingdom aims to attract 127 million tourists in 2025, further positioning itself as a leading global travel destination. This ambitious target aligns with its Vision 2030 objectives to diversify the economy and boost non-oil revenues. Tourism spending for the year is projected to reach SR346.6 billion, fueling economic growth and strengthening private sector demand.
Record-Breaking Tourism Growth in 2023 and 2024
Surpassing Expectations in 2023
Saudi Arabia welcomed nearly 104 million tourists in 2023, exceeding its Vision 2030 milestone ahead of schedule. Of these, 27 million were international visitors, while 77 million were domestic tourists.
Mid-Year Achievements in 2024
By June 2024, the Kingdom recorded 59.74 million tourists, showcasing continued growth in the sector. The Ministry of Tourism has set a year-end target of 119.6 million tourists, reflecting significant progress toward the 2025 goals.
Economic Contributions of Tourism
- Investment Surge: By August 2024, the tourism sector attracted SR8 billion in investments, with projections to exceed SR15 billion by the year's end.
- Rising Tourist Spending: Midway through 2024, tourist spending reached SR156.6 billion, significantly boosting the private sector. The total spending for 2024 is expected to hit SR304 billion.
A Path to Global Tourism Leadership
By introducing a VAT refund program for tourists, Saudi Arabia is setting the stage for an improved visitor experience while strengthening its reputation as a premier global tourist destination. This initiative is not only an economic boon but also a step toward achieving the Vision 2030 goals of sustainable development and global engagement.
