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Khaleej Times
4 days ago
- Business
- Khaleej Times
UAE approves Dh3.2 billion VAT refunds for citizens building new homes until June 2025
The UAE's Federal Tax Authority (FTA) continues to see strong results from its digital VAT refund systems for eligible categories, maintaining high levels of operational efficiency throughout 2025. The FTA on Sunday revealed the results of these systems for the first half of the year, including the VAT refund system for new residences for UAE nationals and the VAT refund system for tourists. The FTA announced that, since the launch of the service approximately eight years ago and up until June 2025, the total number of approved applications for VAT refunds related to new residences for UAE nationals reached approximately 38,000, amounting to a total value of Dh3.2 billion. This marks a significant increase from the 31,000 approved applications valued at Dh2.54 billion by June 2024, reflecting a 22.74 per cent growth in the number of applications and a 25.72 per cent increase in the value of refunds within the past year. The FTA also highlighted that more than 7,000 new applications for VAT refunds for UAE nationals building new residences were approved between June 2024 and June 2025, amounting to Dh653.1 million. Furthermore, in the first half of 2025 alone, 3,097 new applications were approved, resulting in refunds totalling Dh284.77 million. Digital tax refund system for tourists The FTA highlighted the continued significant expansion of the digital tax refund system for tourists, as the number of retail shops electronically linked to the system saw consistent growth across all emirates. By the end of June 2025, the number of outlets registered with the Authority and connected to the system had increased to 18,410 shops, compared to 17,720 shops by the end of 2024 and approximately 17,080 shops by June 2024. The FTA further noted that 697 outlets connected to the system in the first half of 2025, up from 540 outlets during the same period in 2024, marking an increase of over 29 per cent. This brings the total number of outlets that have joined the digital tax refund system for tourists in the past two years, including the first half of 2025, to 3,390 outlets. With regard to the self-service machines that fully automate the tax refund process for tourists departing the country in approximately two minutes per transaction, which are available at major shopping malls, hotels, and departure points for tourists, the number of these machines reached 96 by the end of June. Khalid Ali Al Bustani, Director General of the FTA, said, 'The indicators reflect the ongoing development and upgrade of our digital systems in line with global best practices, and in alignment with the UAE's digital transformation strategy. The Authority's initiatives in this regard have positively impacted the overall quality and performance of its services, particularly the digital VAT refund systems for eligible categories. 'Notable examples include the tax refund services for new residences for UAE nationals and VAT refund for tourists, which have undergone continuous improvement to streamline and expedite the refund process. 'Among the key initiatives in this area is the 'Maskan' smart application, which enhances the ease and convenience of VAT refunds for UAE nationals, and relies on paperless procedures with 100% fully digitised procedures.' Al Bustani added: 'As part of its efforts to develop digital services, FTA launched last December the world's first e-commerce purchases VAT refund system for tourists during their stay in the UAE, supporting the UAE's leadership in all sectors, including the tourism sector and the e-commerce sector, in continuation of what has been achieved in this field, where more than two years ago the Authority launched the digital VAT refund system for tourists, which is based on 100 per cent paperless procedures and is constantly updated, and provides a digital platform that allows tourists to scan their passports easily, and automatically share their transactions as digital invoices, check their invoices through the shopper portal for a seamless shopping experience, and receive a refundable tax credit for their purchases in a convenient and fully digitalised manner.' He stressed that the authority would continue to launch and implement various projects and initiatives in the field of digital transformation in the tax sector to keep pace with the government's digital transformation strategy placed for all services based on smooth and proactive digital infrastructure, supporting efforts to reduce bureaucracy and maintain high levels of customer satisfaction.
Zawya
17-07-2025
- Business
- Zawya
Kenya: Make digital giants pay their fair share of taxes
The current international tax sys- tem on digital systems, inher- ited from the 20th century, taxes the factory, not the algorithm. It recognises warehouses, butignores clouds. As a result, the 10 largest platforms (Google, Apple, Meta, TikTok, etc.) generated more than $500bn in rev- enue in 2023, largely escaping taxation. In many developing countries, they pay a tiny fraction of what they should. Meanwhile, tax revenues are eroding, inequalities are widening, and states are losing their means of action. The OECD Agreement, which was sup- posed to tax profits where the users are located and introduce a global minimum tax, has stalled. The US Congress blocked its ratification, and the new Trump ad- ministration buried it by withdrawing the US from the process. Taxation has become a foreign policy tool. This legal vacuum encourages uni- lateral tax measures. Several countries are maintaining or considering their own digital taxes, in the absence of a multilat- eral framework. But the American pressure is formidable: India, a pioneer in this area, announced on 1 April that it was abandon- ing its tax on non-resident companies that earn digital advertising revenue from Indican businesses (2%, yielding €440m in 2022), under the threat of trade reprisals. In Africa, the stakes are high. Accord- ing to the Economic Commission for Af- rica, the continent could lose up to 30% of its VAT revenue by 2030 if nothing is done. Tax administrations, such as that of Kenya, are struggling to trace the digital flows that pass through Amsterdam before disappearing into the Virgin Islands. Governments are under pressure from their people, who are revolting because of the unbearable tax burden, as in the DRC or Kenya. Small taxpayers pay for everyone: how can it be justified that a farmer is taxed on his livestock income, while a multinational raking in millions is exempt? But Africa is not standing by and doing nothing. Kenya introduced a 1.5% tax on the turnover of digital platforms, supple- mented by 16% digital VAT, for an accrual of $78m in 2023. Nigeria has introduced a similar tax framework. These simple and effective models protect local non-digital SMEs while restoring tax equity. These are not 'anti-GAMAM' (Google, Amazon, Meta, Apple, and Microsoft) taxes, but transitional, non-discriminatory measures pending a global agreement. In Europe too, digital taxes have borne fruit, bringing in €350m for France, £430m for the UK. But they are now being tar- geted by Washington. In London, there is a parliamentary debate: should such taxation be maintained despite the threat of sanctions and perhaps bigger tariffs, when the country is planning large budget cuts by 2030? Faced with this impasse, a new bal-ance is possible. In 2024, 110 countries supported a UN framework convention on taxation. Its objectives are to intro- duce a withholding tax on digital services, integrated into bilateral tax treaties; to guarantee egalitarian governance (one country, one vote); and to strengthen the capacity of Southern countries to trace and tax digital flows. This dynamic could take shape in a North–South forum, backed by the UN, with three key missions: pooling good tax practices; coordinating transitional taxes to avoid a disorderly proliferation; and strengthening administrative and technological capacities, particularly with regard to the traceability of digital flows. Pivotal role Europe has a pivotal role to play. On the heels of American tariffs, it has announced the possibility of a tax on American digital services. This wake-up call is beneficial and could inspire many countries in the Global South if a coalition were to form. Europe must maintain diplomatic pressure on Washington to revive the multilateral agreement, while co-constructing an al- ternative with the emerging powers within the framework of this North-South forum. This agile minilateralism – led by India, Brazil, Nigeria, South Africa and Europe (UK and EU) – could structure a post-Western, more balanced and more le- gitimate governance of digital technology. Digital flows are still escaping the tax radar, but not the appetite of the giants. It is time to rewrite the rules of the game. Taxing digital technology does not mean holding back innovation: it means restor- ing fiscal justice, protecting states and reaffirming a fundamental principle – sovereignty is not negotiable. n Abdelmalek Riad, an economist, is Vice- President of Asoria, a digital economy taxa- tion platform. The 10 largest platforms (Google, Apple, Meta, etc.) generated over $500bn in revenue in 2023, but mostly escaped tax. © Copyright IC Publications 2022 Provided by SyndiGate Media Inc. ( By Abdelmalek Riad
