VAT Refund System for Tourists to Launch in Saudi Arabia in 2025

A value-added tax (VAT) refund system for international visitors will be implemented in Saudi Arabia, starting in 2025. The initiative, outlined in the Kingdom’s 2025 budget, is designed to enhance the travel experience and further attract tourists to the country. The Zakat, Tax, and Customs Authority will oversee the system’s implementation to streamline tax compliance for tourists with an emphasis on a visitor-friendly environment.

As part of its efforts to become a global tourism hub, the kingdom aims to attract 127 million visitors by the end of 2025. Tourism spending is projected to reach SAR 346.6 billion by 2025. The kingdom welcomed nearly 104 million tourists, exceeding its Vision 2030 target seven years ahead of schedule. This included 27 million international visitors and 77 million domestic travelers, highlighting the growing appeal of the country as a tourist destination.

In 2024, the Ministry of Tourism reported 59.74 million tourists by June. By the end of the year, Saudi Arabia is targeting a total of 119.6 million visitors. The kingdom has also seen substantial investments in its tourism infrastructure, with SAR 8 billion in investments secured by August 2024, and is expected to rise to SAR 15 billion by the end of the year.

Tourism spending in Saudi Arabia reached SAR 156.6 billion by mid-2024, with the kingdom targeting a total of SAR 304 billion in tourism revenue by the end of the year. This growth is expected to continue as the government’s efforts to modernize the sector, promote cultural tourism, and invest in new tourist attractions pay off.