UAE’s FTA to introduce new scheme for tobacco products next year

The UAE’s Federal Tax Authority (FTA) has stated that starting from January 1, it will be rolling out its ‘Marking Tobacco and Tobacco Products’ scheme.

The scheme involves the electronic monitoring of all types of imported, produced and locally-traded cigarettes, from production to consumer, to ensure full compliance with payment of excise tax. It will be gradually implemented beyond cigarettes to cover all tobacco products.

Beginning in January, manufacturers and importers of all cigarettes are required to apply for the digital stamp that will then need to be added onto the packaging of all tobacco products sold in the UAE before those products leave the factory.

The monitoring process involves the use of a stamp (digital seal) on the packaging of the tobacco products. The stamp which can be read by special devices will provide the FTA with all the data to verify whether the excise tax has been paid on the product.

Starting from May 2019, the import of all cigarettes without the digital stamps will be banned.

From August 2019, cigarettes that don’t have the digital stamp cannot be retailed or traded in the UAE, and retailers here will be banned from selling cigarettes that don’t have the digital stamps on the packaging.

A penalty will be implemented on any person trading in cigarettes without the digital stamp on them in the UAE thereafter.

The FTA has said that there will be inspections at custom outlets and markets to ensure compliance with the scheme which will in turn prevent the sale of contraband and counterfeit products.

Khalid Ali Al Bustani, director-general of the FTA, said, “The UAE is the first country in the region to use such a system, which employs sophisticated methods to promote accuracy and effectiveness. The authority has completed its preparations to implement the new system in accordance with the best international standards and in coordination with customs departments, economic development departments, producers and importers of cigarettes and tobacco products.”