‘Digital Tax Stamp’ on water pipe tobacco and electrically heated cigarettes as of November 1
H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, and Chairman of the Federal Tax Authority, FTA, has issued a Decision whereby the "Marking Tobacco and Tobacco Products Scheme" will be implemented on water pipe tobacco and electrically heated cigarettes as of 1st November, 2019.
The decision also determines the dates when "Digital Tax Stamps" will be made available, as well as the standards for stockpiling them.
The authority has explained that the scheme facilitates inspections at local markets and customs ports to prevent the sale of contraband products and goods where the tax liability was not paid, and combat commercial fraud. Digital Tax Stamps will be placed on packages of tobacco products and registered in the FTA database. The stamps store digital information that can be read with a special device to verify that all taxes due on the said products have been paid.
In a press statement issued today, the FTA asserted that the decision supports its efforts, in collaboration with relevant entities, to collect taxes, combat tax evasion, and implement uniform procedures to ensure transparency, guarantee rights, and highlight the responsibilities of all taxable persons.
The FTA Decision No. 2 of 2019 on Implementing the Marking Tobacco and Tobacco Products Scheme consists of five articles. It determines 1st November, 2019, as the date when the Digital Tax Stamps will be available to order by importers or producers of designated excise goods, which include water pipe tobacco and electrically heated cigarettes.
The decision also stipulated that as of 1st March, 2020, it will be prohibited to import designated excise goods not bearing the stamps into the UAE, then starting 1st June, 2020, it will no longer be permissible to supply, transfer, store, or possess unmarked designated excise goods in the UAE.
As per the decision, Digital Tax Stamps must be securely stored prior to being affixed to the designated excise goods in accordance with a set of minimum-security requirements.
The person responsible for storing the stamps shall be required to provide information, data, and records as requested by the FTA in order to confirm that the provisions of the article have been implemented.
The FTA’s press statement went on to explain that the decision was part of its 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 until they reach the end consumer to ensure full compliance with excise tax obligations.
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