RIYADH, Saudi Arabia — In a move to enhance the visitor experience, Saudi Arabia will launch a value-added tax (VAT) refund system for tourists in 2025. The system, announced in the Saudi Budget for the upcoming fiscal year, will be managed by the Zakat, Tax, and Customs Authority.
The new VAT refund initiative is part of the Kingdom’s broader effort to make Saudi Arabia a more attractive destination for international visitors. The program is expected to simplify tax processes for tourists, allowing them to reclaim VAT on goods purchased during their stay in Saudi Arabia. This will be a key feature in enhancing the overall travel experience, and it aligns with the government’s commitment to supporting the tourism sector.
As part of its long-term tourism objectives, Saudi Arabia aims to attract 127 million visitors by the end of 2025, as outlined in the National Tourism Strategy. The strategy aims to increase both domestic and international tourism, positioning Saudi Arabia as a global destination of choice.
The Kingdom has set ambitious targets for tourism spending, projecting it will reach SR346.6 billion (around $92.4 billion) by 2025. This spending is expected to significantly boost the country’s economy by increasing non-oil revenues and generating higher demand within the private sector.
Saudi Arabia has already made remarkable progress in its tourism sector. In 2023, the country welcomed nearly 104 million tourists, surpassing its Vision 2030 goal of 100 million visitors seven years ahead of schedule. The total included 27 million international tourists and 77 million domestic travelers, signaling Saudi Arabia’s growing appeal as a top travel destination.
In 2024, the Ministry of Tourism reported that by June, the country had attracted 59.74 million tourists, including both international and local visitors. This strong growth supports the private sector and contributes to an increase in non-oil revenues, making tourism a vital part of the Kingdom’s economic diversification.
By the end of 2024, Saudi Arabia aims to attract 119.6 million tourists, continuing the upward trend and advancing its long-term tourism goals. The Kingdom’s focus on tourism is also reflected in substantial investments made in the sector. By August 2024, the tourism industry had secured SR8 billion in investments, and this figure is expected to rise to SR15 billion by the end of the year.
Tourism spending has been a major contributor to the economy in 2024, reaching SR156.6 billion by mid-year. By the end of 2024, the country aims to achieve a total of SR304 billion in tourism spending, highlighting the sector’s importance in driving economic growth and diversifying Saudi Arabia’s sources of income beyond oil.
Saudi Arabia’s tourism industry has shown impressive growth, and with the introduction of the VAT refund system for tourists in 2025, the Kingdom is expected to continue its momentum toward achieving its ambitious goals for the sector. These initiatives not only improve the experience for visitors but also support the Kingdom’s Vision 2030, which aims to reduce Saudi Arabia’s dependence on oil and create a more diversified and sustainable economy.
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