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Saudi Arabia to Launch Tourist VAT Refund System in 2025, Boosting Travel and Economic Growth

The Zakat, Tax, and Customs Authority will oversee the implementation of the system, which is designed to streamline tax compliance and enhance the travel experience

Saudi Arabia will introduce a value added tax (VAT) refund system for tourists in 2025, as outlined in the Saudi Budget statement for the upcoming fiscal year.

The Zakat, Tax, and Customs Authority will oversee the implementation of the system, which is designed to streamline tax compliance and enhance the travel experience. This initiative underscores Saudi Arabia’s dedication to creating a visitor-friendly environment and attracting more tourists to explore the Kingdom.

As part of its tourism goals, Saudi Arabia aims to attract 127 million visitors by the end of 2025, aligning with the National Tourism Strategy. The strategy promotes both domestic and international tourism, reinforcing the Kingdom’s position as a global destination of choice.

Tourism spending is projected to reach SR346.6 billion in 2025, contributing significantly to the domestic economy, increasing non-oil revenues, and boosting private sector demand.

Building on recent momentum, Saudi Arabia welcomed nearly 104 million tourists in 2023, surpassing its Vision 2030 target seven years ahead of schedule. This included 27 million international visitors and 77 million domestic travelers, demonstrating the Kingdom’s growing appeal.

In 2024, the Ministry of Tourism reported attracting 59.74 million local and international tourists by June. This figure supports private sector growth and contributes to the rise in non-oil revenues within the GDP. By the end of 2024, Saudi Arabia aims to reach 119.6 million tourists, further advancing its tourism ambitions.

The tourism sector has also seen substantial investment in 2024, with SR8 billion secured by August. This figure is expected to rise to SR15 billion by year-end, highlighting the sector’s role in driving economic diversification.

Tourism spending reached SR156.6 billion by mid-2024, contributing directly to the domestic economy and supporting the private sector. The Kingdom aims to achieve SR304 billion in total tourism spending by the end of 2024.

Source: zawya

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