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02 October 2023

Selling cigarettes not bearing digital tax stamps prohibited as of tomorrow: FTA

By Wam

The Federal Tax Authority, FTA, has announced that the sale and possession of all types of cigarettes not bearing 'Digital Tax Stamps' will be prohibited across UAE markets starting tomorrow, 1st August.

In a press statement released on Wednesday, the Authority explained that two types of Digital Tax Stamps were approved, the first of which is 'Red' and meant to be placed on the packaging of tobacco products (including cigarettes) sold at all local markets, as well as at duty-free in arrival lounges. The second type is 'Green' and earmarked for tobacco products sold at duty-free in departure lounges.

Prohibiting the sale in local markets of cigarettes packets not bearing the Digital Tax Stamps is part of the timeline set for the ‘Marking Tobacco and Tobacco Products Scheme’, which went into effect at the beginning of 2019.

The Scheme seeks to electronically track cigarettes packs from the production facility and until they reach the end-consumer, in order to protect consumers from low-quality products, combat tax evasion, and ensure that the Excise Tax due on these products has been settled, as per Cabinet Decision No. 42 of 2018 on Marking Tobacco and Tobacco Products and FTA Decision No. 03 of 2018 on Implementing the Marking Tobacco and Tobacco Products Scheme.

The Authority called on all cigarette dealers and producers in the UAE to comply with these measures in order to avoid the penalties outlined in the Cabinet Decision on Violations of Procedures for Marking Tobacco and Tobacco Products.

The FTA also appealed to consumers to check for Digital Tax Stamps on the packaging of cigarettes they buy and inform competent authorities of any violations, noting that the Scheme serves to tighten controls on the market, ensure compliance with international best practices, verify that tax obligations have been met, and guarantee the quality and safety of tobacco products in the UAE.

FTA Director-General Khalid Ali Al Bustani asserted that the Scheme is part of the Authority’s strategy to prevent tax evasion, protect consumer rights and preserve the environment using advanced, efficient, and accurate electronic control systems to support the implementation of the relevant legislation, which clearly outlined obligations for both the Authority and taxpayers, and set procedures to prevent the sale of harmful, lower-quality products.

"The timeline for the Scheme allowed cigarette traders and producers sufficient time to prepare for the new system," he noted.