The UAE's Federal Tax Authority (FTA) has made digital tax stamps mandatory for all waterpipe and electrically-heated tobacco products in the country starting from today (March 1).

This comes as part of Phase Two of the Marking Tobacco and Tobacco Products Scheme which aims to utilise the latest digital solutions to boost the efficiency of tax control systems and, in turn, support the UAE’s transition to a knowledge-based economy in line with the National Agenda.

In a statement, the FTA has reaffirmed its decision to ban the import of all waterpipe tobacco and electrically-heated tobacco products that do not bear a digital tax stamp (DTS).

As of June 1, 2020, the import, transport, storage and possession of such unmarked excise goods will be prohibited in all UAE local markets, the statement added.

Since the launch of Cabinet Decision No. 42 of 2018 on Marking Tobacco and Tobacco Products, the FTA had rolled out a comprehensive scheme to ensure the seamless implementation of the decision.

The scheme enables producers, importers and distributors of tobacco and tobacco products to purchase DTSs from the system operator through the FTA website, to place them on the packaging of their products before they are released in local markets.

The FTA called on all concerned entities to comply with these regulations to avoid penalties.

The Phase One of the Marking Tobacco and Tobacco Products Scheme, which came into force in January last year, yielded promising results in marking all types of imported, and locally manufactured and traded cigarette packets with DTS.

The FTA had given a directive that such products should be marked before leaving the manufacturing facilities to indicate the payment of the applicable excise tax across the UAE.

On May 1 last year, the FTA issued a ban on importing all types of unmarked cigarette packets into the UAE. Following that in August, the sale of cigarette packets not bearing a DTS was banned across all local markets.

The UAE is the first country in the region to adopt such digital solutions to protect consumers from commercial fraud and low-quality products, mitigate health and environmental risks and combat tax evasion, said the statement from FTA.

The scheme enhances the FTA’s ability to collect taxes, in cooperation with relevant entities, through standardised regulatory procedures that protect the rights of taxable persons and ensures their compliance, as well as boosts competitiveness and transparency across all of its dealings, it added.-TradeArabia News Service