The Federal Tax Authority confirmed that as of August 1, 2019, the sale of Tadawul and the possession of all types of cigarettes that do not carry "red digital tax stamps" will be banned in the local markets within the framework of the timetable which came into effect on January 1, (3) for the year 2018 on the application of the labeling system on tobacco and tobacco products, which aims to track electronic cigarette packages from their production until they reach the final consumer to protect consumers from bad products and the fight against tax evasion and ensure full compliance with the payment of selective tax Payable on them.
In a press release today, the TRA called on all traders, consumers, producers and suppliers of cigarettes to comply with the decision to avoid fines imposed by the Council of Ministers' decision to contravene procedures for the application of the distinctive mark on selective goods and marking tobacco and tobacco products. Of cases of commercial fraud to contribute to protect consumers from leakage of poor products that do not conform to specifications harmful to health, the environment to markets, and aims to combat tax evasion.
The Authority noted that two types of "digital tax stamps" have been adopted. The first is the red stamps that are installed on tobacco packages and products (including cigarettes), which are allowed to be traded in all local markets in the UAE as well as to those entering the country through free markets. The second is green stamps that are installed on tobacco packages and products that are allowed to be sold in free markets for those leaving the country.
Khalid Ali al-Bustani, Director General of the Federal Tax Authority, confirmed the presence of a remarkable response to the transactions related to the digital tax stamps and their registration in the Authority's database. He noted that the Authority was keen to organize a series of training courses for the inspectors of the economic development departments and local customs departments in the country on " And mechanisms for applying the labeling system to tobacco and tobacco products. "
"These training courses are part of the preparations for the implementation of the inspection campaigns to ensure compliance with the ban on the sale of all types of non-tax-stamped cigarettes in the local market as of August 1. These courses are of great importance for their contribution to the successful implementation of the system. Which facilitates inspections and strengthens market control mechanisms in this area to prevent the sale of non-compliant products to the required tax. "
He called on all those who are subject to selective taxation from companies operating in the manufacture and supply of tobacco and its products to comply with the system and its requirements and cooperate with the Authority to implement it accurately and effectively. He affirmed that the decision supports the Authority's efforts to collect taxes and fight tax evasion in cooperation with the concerned authorities to implement uniform procedures to guarantee the rights and duties of those subject to taxation. Transparency in the procedures governing their dealings with the TRA and also called on consumers to report any irregularities in the markets via e-mail.
The digital tax stamps are installed on tobacco packages after they are registered in the Authority's database. Each stamp contains electronic information that can be read by a special device used by the inspectors authorized by the economic departments to verify the payment of the tax on these products.
During the training sessions, the TRA's representatives provided a detailed explanation of the system and how it works, and the tools for verifying the existence of the distinctive signs adopted in order to increase the regulatory awareness of the tax system of the inspection and market control workers. The stages of implementation of the system and the products included in the application were reviewed at each stage, Including Decree No. 42 of 2018 of the Council of Ministers on "Marking Tobacco and Tobacco Products", which established a mechanism for labeling the selective tax on these goods, Amat Al Mozayyah on these selected commodities within the production facility after the packaging directly if they are produced in the country or before importation if they are produced outside the UAE in the manner and in the place determined by the Federal Tax Authority for each product.