The move is part of the Marking Tobacco and Tobacco Products Scheme which was implemented on cigarettes in January in a bit to combat tax evasion
Starting from Q4 this year, the Federal Tax Authority (FTA) will electronically track all tobacco products used in shisha, from their production to the end consumer, in order to ensure they fully comply with excise tax laws.
The move, which is part of the 'Marking Tobacco and Tobacco Products' scheme, places digital marks on products that are imported or produced and distributed locally, the authority announcement in a meeting.
It was enforced on cigarettes on January 1, covering all imported and domestically produced and distributed cigarettes. Cigarette packs are marked with digital marks before they leave the factory to local markets, ensuring the excise tax has been paid.
As of May 1, 2019, any cigarettes imported into the UAE without digital marks will be prohibited, while the sale of cigarettes packs not bearing the marks will also be prohibited starting August this year.
The scheme was initially issued in July 2018 as part of a cabinet decision to curb tax evasion in and protect taxpayers’ rights.
“This meeting is part of the Federal Tax Authority’s efforts to maintain direct communication with the representatives of the tobacco companies and all other stakeholders in the sector, as well as with the system operator who developed the Digital Marks to be placed on tobacco products,” said FTA director General Khalid Ali Al Bustani.
“It allows us to review our plan of action and go over the requirements needed to implement the scheme in its second phase. The meeting follows extensive communication with concerned companies and with the system operator; it seeks to synchronise systems and improve coordination among all parties involved in order to ensure the successful and effective application of the system,” he added.
The UAE is the first in the region to implement the system, which also aims to enhance competitiveness, promote transparency and avoid commercial fraud in all transactions.
The FTA urged all businesses subject to excise tax to comply with the new system’s regulations for manufacturing and supplying tobacco and tobacco products or face penalties.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.