New UAE tax rule announced to cover Shisha and e-cigarettes

Digital tax stamps to be placed on products to curb sale of fake goods and tax evasion
New UAE tax rule announced to cover Shisha and e-cigarettes
The move is part of the FDA’s strategy to expand the scope of the ‘Marking Tobacco and Tobacco Products Scheme’ to cover all tobacco products – imported and locally produced and distributed – which will be electronically tracked from production and until they reach the end consumer to ensure full compliance with Excise Tax laws.
By Gavin Gibbon
Thu 11 Jul 2019 11:07 AM

Shisha tobacco and e-cigarettes will be will electronically tracked with digital tax stamps from November 1 in a bid to crack down on the sale of contraband products and tax fraud.

The scheme will see inspections at local markets and customs ports.

Digital tax stamps will be placed on tobacco products’ packages and registered in the Federal Tax Authority database. The stamps store digital information that can be read with a special device to verify that all taxes due on the products have been paid.

As of March 1, 2020, it will not be possible to import designated excise goods not bearing the stamps into the UAE. And from June 1 next year it will no longer be legal to supply, transfer, store, or possess unmarked designated excise goods in the country.

The move is part of the FDA’s strategy to expand the scope of the ‘Marking Tobacco and Tobacco Products Scheme’ to cover all tobacco products – imported and locally produced and distributed – which will be electronically tracked from production and until they reach the end consumer to ensure full compliance with Excise Tax laws.

Phase one of the scheme went into effect on January 1, this year, affecting all types of imported and locally produced and distributed cigarettes, and making it possible for producers and importers of cigarettes to place their orders for purchasing Digital Tax Stamps. As of May 1, 2019, the import of any type of cigarettes into the UAE not bearing the Digital Tax Stamps has been prohibited; while the sale of cigarette packs not showing the stamps will be prohibited across UAE markets from next month.

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