Federal Tax Authority boosts preparations ahead of ban on importing waterpipe tobacco

Photo: WAM

The Federal Tax Authority has ramped up its preparations ahead of implementing the ban on importing any type of waterpipe tobacco (known in Arabic as ‘Mu’assel’) and electrically heated cigarette plugs unless they carry the ‘Digital Tax Stamps’ as of March 1, 2020.

The ban marks phase two of the ‘Marking Tobacco and Tobacco Products Scheme’, which seeks to protect consumers from commercial fraud and low-quality products, in addition to combating tax evasion.

In a press statement issued today, the FTA noted that, as part of its plan to raise awareness among all Persons affected by or involved in implementing the Scheme, the Authority held the fourth workshop to introduce producers, importers, and distributors of tobacco and tobacco products to the Scheme’s procedures and objectives. The statement went on to note that as of June 1, 2020, it will be prohibited to supply, transfer, or stockpile waterpipe tobacco or electrically heated cigarettes that do not carry the ‘Digital Tax Stamps’ in local markets.

FTA Director General Khalid Ali Al Bustani opened the workshop, which brought together stakeholders from both local markets and free zones, as well as several FTA officials and experts from the company operating the system.

The Authority explained that the workshop is part of its efforts to establish and maintain contact with representatives from the sector, as the operating company representatives presented the plan of action and requirements for implementing the Scheme over the upcoming period.

Al Bustani asserted that the ‘Marking Tobacco and Tobacco Products Scheme’ is an innovative solution for combatting tax evasion and protecting consumers’ health from subpar products. The FTA Director General urged Persons subject to Excise Tax in the in the tobacco manufacturing and supply sector to comply with Cabinet Decision No. (42) of 2018 and FTA Decision No. (2) of 2019 on Marking Tobacco and Tobacco Products. The Digital Tax Stamps facilitate inspection and control procedures; it allows tobacco products to be digitally tracked from the manufacturing facility and until they reach the end consumer to ensure they are compliant with standards and that all due Excise Taxes have been paid.

The workshop is part of the Federal Tax Authority’s efforts to establish direct contact with producers, importers, and distributors of waterpipe tobacco and electrically heated cigarettes, among other stakeholders from the sector and representatives from the system operator, Al Bustani noted, adding that this workshop was preceded by several meetings and constant communication with relevant entities, including Departments of Economic Development, local customs agencies, and representatives from relevant companies and the system operator to ensure systems meet all necessary requirements, and coordinate among all parties involved to ensure the efficient and smooth roll-out of the system.

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