A new shipment of cigarette packets marked with the Digital Tax Stamps approved by the Federal Tax Authority (FTA) has made it to Dubai. The Stamps will be electronically tracked to ensure Excise Tax due on tobacco products has been settled.
In a press statement issued today, the Authority explained that it had finalised procedures for delivering the new shipment in collaboration with Dubai Customs to sell in local markets, noting that as of January 1, 2019, the FTA-approved Digital Tax Stamps were made available to order from the system operator and be placed on cigarette packs before they leave the manufacturing facility to hit local markets.
FTA Director General His Excellency Khalid Ali Al Bustani asserted that collaborating with government and private-sector partners allowed the Authority to successfully implement the Marking Tobacco and Tobacco Products Scheme, according to the timeline the FTA had set, as per Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products. H.E. noted that FTA Decision No. (3) of 2018 specified the dates that the Digital Tax Stamps would be available in the UAE, as well as the criteria for storing them. The Decision went into effect on January 1, 2019, and applies to the cigarettes.
H.E. Al Bustani explained that the Scheme is mandatory for the cigarettes – imported or locally produced and traded – and will be gradually expanded to cover all tobacco products, electronically tracking them from the production facility and until they reach the final consumer to ensure full compliance with Excise Tax obligations on tobacco and tobacco products. The Scheme establishes an accurate, effective and comprehensive regulatory framework to support the Authority’s efforts to collect taxes, combat tax evasion, and implement standard procedures to guarantee the rights and obligations of all Taxable Persons and ensure transparency in all procedures governing their dealings with the Authority.
“Ever since the Decision was issued, the Authority has been implementing a comprehensive plan to reach its objectives, most notable of which is the accurate and seamless implementation of the Scheme, all while avoiding the interruption of commercial activities. To that end, the FTA afforded a long grace period, allowing all producers, importers, retailers, and other stakeholders in the tobacco sector to prepare for the new Scheme and make a frictionless transition towards it,” H.E. Al Bustani went on to say.
“The Authority sought to spread awareness of the Scheme and its procedures, seeing as the UAE is the first country in the region to implement such a programme,” H.E. Al Bustani explained. “The FTA organised a series of workshops and training programmes in coordination with the company hired to operate the system, as well as all concerned departments and authorities, in an effort to combat tax evasion and boost control at entry and exit ports. FTA experts also trained employees and inspectors at Departments of Economic Developments across the UAE to implement the Scheme as per the timeline set in the relevant FTA Decision.”
H.E. Ahmed Mahboob Musabih, Director General of Dubai Customs, said: “We are committed to full cooperation and coordination with the Federal Tax Authority in implementing any mechanisms or programs that would promote and support legitimate trade and combat tax evasion. To ensure that traders meet their tax obligations, we have put in place procedures to effectively control ports of entry. With the arrival of the new shipment of cigarette packets marked with “digital tax stamps” approved by the Federal Tax Authority, the procedures are complete to ensure that merchants comply with the excise tax due on tobacco products.”
He added: “Dubai Customs will work hand in hand with the FTA to implement all necessary measures that facilitate trade movement toward more growth of our national economy.”
The Federal Tax Authority praised efforts by all stakeholders to facilitate the delivery of the shipments of cigarette packages marked with “Digital Tax Stamps” to the UAE. The entities included customs departments at all boarders and airports, as well as the Departments of Economic Development in various emirates.
Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products stipulated that the Digital Tax Stamps be fixed on specified Excise Goods within the production facility immediately after packaging if produced locally – or prior to importing them in the case of imported tobacco products – in the place and manner specified by the Federal Tax Authority.
The Authority reported receiving a large volume of orders for the Digital Tax Stamps and directed the company tasked with operating the system to deliver them to the manufacturers in order to apply them on cigarettes supplied to UAE markets. The Authority urged all suppliers, manufacturers, and traders in local markets to avoid stocking large quantities of cigarettes not bearing the Digital Tax Stamps in preparation for the ban on trading unmarked cigarette packs in all UAE markets.
