Federal Tax Authority Allocates Tax Liabilities Worth Dh2.74 Million

Press release
Published March 15th, 2021 - 12:46 GMT
Federal Tax Authority Allocates Tax Liabilities Worth Dh2.74 Million
Khalid Al Bustani
Highlights
The Federal Tax Authority has carried out a series of field inspection campaigns, in cooperation with the concerned authorities, to verify compliance with the regulations that prohibit the supply

The Federal Tax Authority has carried out a series of field inspection campaigns, in cooperation with the concerned authorities, to verify compliance with the regulations that prohibit the supply, transportation, storage and possession of all types of water pipe tobacco and electrically heated cigarettes that are not marked with the ‘digital tax stamps’, DTS. 

Mandatory implementation of the DTS system began at the beginning of 2021 following the timeline set for the second phase of the ‘Marking Tobacco and Tobacco Products Scheme’, which aims to protect consumers from commercial fraud and low-quality products. The initiative will mitigate health and environmental risks and combat tax evasion, while ensuring full commitment to the due Excise Tax on these goods.

In a press statement issued today, the Authority revealed that the field visits carried out during January and February resulted in the discovery of more than 14 thousand kilograms of water pipe tobacco were seized in addition to 897 packages of electrically heated cigarettes not bearing a digital tax stamp. The total value of tax liabilities related to the seizures performed during these inspection visits reached AED2.74 million, and necessary legal measures have been implemented on violators to ensure that violations are not repeated.

His Excellency Khalid Ali Al-Bustani, Director-General of the Federal Tax Authority,  declared that the application of the ‘Marking Tobacco and Tobacco Products Scheme’ has contributed to tightening control over local markets in line with the best standards and practices to ensure both tax compliance and verification of conformity with the quality and safety of products in the local markets.

His Excellency said that these inspection visits follow up and confirm the importance of the market’s full commitment to the application of the ‘Marking Tobacco and Tobacco Products Scheme’, reiterating his satisfaction at the FTA's  interest in enhancing cooperation and coordination with the concerned federal and local government departments in a manner that ensures the maintenance of high levels of tax compliance, as well as simultaneously  ensuring the protection of consumers and preserving stability and order in the commercial movement of these goods in the marketplace.

The Federal Tax Authority called on all merchants and producers in the local markets to adhere to the system put in place according to Cabinet Decision No. (42) of 2018 regarding the ‘Marking Tobacco and Tobacco Products Scheme’,  emphasizing that the digital tax stamps allow efficient tracking of tobacco packages and products digitally from their point of production until they reach the final consumer. This is to ensure conformity with the approved standard specifications and to fulfill obligations related to the excise tax. The Authority also called on consumers to  ensure that there are digital tax stamps on tobacco packages that they are buying and inform the competent regulatory authorities should they discover any violating dealers.

Background Information

Federal Tax Authority

By virtue of this Federal Law by Decree a public federal authority shall be established under the name of the Federal Tax Authority. The headquarters of the authority shall be located in the city of Abu Dhabi. The authority shall be in charge of managing and collecting federal taxes and related fines, distributing tax-generated revenues and applying the tax-related procedures in force in the UAE.

The authority shall be managed by a board of directors chaired by the Minister of Finance and a sufficient number of members to be appointed and remunerated by a Cabinet resolution, based on the chairman’s nomination. The authority shall have an independent annual budget that shall be deemed as public funds and exempted from all taxes and fees.

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