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Government 1 min read 76 views

Cigarettes Not Bearing Red Digital Tax Stamps will get Prohibited Across Local Markets as of August 1 says Federal Tax Authority

As per the timeline for the Marking Tobacco and Tobacco Products Scheme, which went into effect on January 1, 2019 owning or selling the cigarettes not bearing the Red Digital Tax Stamps will be prohibited across local markets as of August 1, 2019, The Federal Tax Authority admonished.

In order to protect the consumers from low-grade products, combat tax avoidance, and ensure that the Excise Tax due on these products the FTA has issued its Decision No. (3) Of 2018 by Implementing the Marking Tobacco and Tobacco Products Scheme, this seeks to electronically track cigarettes packs from the production facility and until they reach the end-consumer. In a press announcement issued today, the Authority called on all cigarette producers, importers, dealers, and consumers in the UAE to conform to the Decision in order to avoid the penalties outlined in the Cabinet Decision on Violations of Procedures for Applying Digital Tax Stamps on Tobacco and Tobacco Products. The objective, the FTA explained, is to curb attempts at commercial fraud and protect consumers from sub-standard products that harm their health and the environment, in addition to combating tax evasion.

The two types of Digital Tax Stamps were approves and that too was explained by the federal tax authority. The first one is the Red and it means to be positioned on the packs of tobacco products sold at all local markets and duty-free in arrival lounges. The next one is Green and earmarked for tobacco products sold at duty-free in departure lounges.

FTA Director General His Excellency Khalid Ali Al Bustani highlighted the remarkable reply from relevant Taxable Persons to the Digital Tax Stamps procedures. A training workshop was conducted by the authority delving the Objectives and Procedures for Implementing the Marking Tobacco and Tobacco Products Scheme for the inspectors at Departments of Economic Development and local Customs Departments across the UAE.

H.E. Al Bustani says, this workshops were held in preparation for the inspection campaigns, conducted to ensure compliance with the ban on the sale of all types of cigarettes not bearing the Digital Tax Stamps in local markets as of August 1, 2019. These courses are of great value considering their part to the successful execution of the new Scheme, which facilitates inspections, and strengthens market reins to prevent the sale of products that have not met their tax obligations.

The packaging of tobacco products will be sealed with the Digital Tax Stamps and that will get registered in the FTA database. The stamps will contain the data through which the dedicated device used by authorised inspectors will identify whether the taxes on these products were paid.

During the workshops, FTA representatives shed light on the legislation and Decisions pertaining to the Scheme, including Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products, which outlines the mechanism to place the Digital Tax Stamps indicating that Excise Tax has been paid. Tobacco manufacturers are required to place the Stamps on the products within the production facility immediately after packaging, if produced in the UAE, or prior to importing them if they are produced abroad, in the position and manner determined by the Federal Tax Authority.

The FTA Director General called on all businesses involved in the manufacture and supply of tobacco and tobacco products, which are all subject to Excise Tax, to comply with the Scheme and cooperate with the Authority to implement it accurately and effectively. H.E. Al Bustani asserted that the Decision supports the FTAs efforts to collect taxes and combat tax evasion, in association with the relevant entities, to protect Taxable Persons rights and ensure transparency in the procedures governing their dealings with the Federal Tax Authority.

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