UAE to introduce digital tax stamps for shisha and e-cigarettes from November 1

Digital tax stamps will help collect taxes, combat tax evasion and protect consumers from fraud
UAE to introduce digital tax stamps for shisha and e-cigarettes from November 1
By Gavin Gibbon
Wed 07 Aug 2019 08:51 AM

The Federal Tax Authority (FTA) has held a second workshop to prepare for the introduction of the next phase of the ‘Marking Tobacco and Tobacco Products Scheme’.

The scheme will be expanded to cover shisha and e-cigarettes from November 1 and is designed to help collect taxes, combat tax evasion and protect consumers from fraud.

‘Digital tax stamps’ will be made available for purchase by producers and importers of waterpipe tobacco and electrically heated cigarettes, the authority revealed, as it held its second awareness workshop in Dubai to introduce them to the procedures and objectives, as well as the timeline for the second phase.

The first phase of the scheme, where the sale and possession of any cigarette packets not bearing the ‘digital tax stamps’ was prohibited across local markets, was launched on August 1.

FTA director general, Khalid Ali Al Bustani, said: “This workshop is part of the authority’s plan to raise tax awareness among taxable businesses, maintain constant communication with professionals working across all economic activities, and keep them in the loop with regards to the latest developments in tax procedures. These workshops allow us to listen to their opinions and suggestions, and address any obstacles they may be facing to ensure a smooth implementation of tax laws.”

The stamps must be placed on products to indicate that all due taxes have been settled.

As of March 1, 2020, it will be illegal to import into the UAE any of the excise goods outlined in FTA Decision No. (2) of 2019 on Marking Tobacco and Tobacco Products, if they do not bear the stamps. On June 1, 2020, it will no longer be allowed to supply, transfer, store, or possess excise goods in the UAE unless they have the stamps.

The FTA representatives explained that digital tax stamps– which boast advanced security features that prevent any attempts at counterfeits – will be placed on the packaging of tobacco products and registered in the FTA database.

The stamps contain data that can be read with a dedicated device used by inspectors, authorised by the authority or the Departments of Economic Development, as well as customs employees, helping to verify their authenticity and ensuring all taxes have been paid.

Tobacco manufacturers are required to place the stamps on the products within the production facility immediately after packaging, if produced in the UAE, or prior to importing them if they are produced abroad, in the position and manner determined by the Federal Tax Authority for each product.

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