“Federal Taxes”: administrative fines for violating the procedures for applying the distinctive mark to Excise goods

Starting from January, the sale, transfer, storage, and possession of "water pipe" tobacco without a digital tax stamp is prohibited

The Federal Tax Authority has confirmed that, starting from the first of January 2021, the supply, transfer, storage, or possession of any hookah tobacco products and cigarette rolls that are electrically heated in the UAE will not be allowed, unless they bear a digital tax stamp.

The authority urged those concerned with the decision, including local suppliers and manufacturers, to comply with the decision by ensuring that their products of hookah tobacco and cigarette rolls, which are electrically heated, carry the tax stamp and ensure that the market is free of them to avoid the violations mentioned in Cabinet Resolution No. (33) of 2019 regarding Administrative fines for violating the procedures related to the application of the distinctive mark on Excise goods.

The authority indicated that, as of the beginning of last March, all kinds of hookah tobacco (molasses) and cigarette rolls that were electrically heated, not identified by "digital tax stamps", were banned from importing into the country, as part of the second phase of the system of "distinctive marks on tobacco and its products" After the successful implementation of the first phase of the system, according to which the sale (circulation) and possession of all types of cigarettes that do not carry "digital tax stamps" were prohibited in the local markets as of the beginning of August 2019.

This system helps improve the ability of the Federal Tax Authority to collect selective taxes on hookah tobacco (molasses) and cigarette rolls that are electrically heated in the country, after being imported or locally manufactured and controlled, in addition to enabling the concerned authorities to analyze and audit the supply chain to monitor trade in non-tobacco products. Legitimate better.

The authority explained that the system facilitates inspections and control in customs outlets and local markets to prevent the sale of products that do not meet the tax due on them, and to combat commercial fraud, so that "digital tax stamps" are installed on tobacco product packages and registered in the authority's database, so the digital tax stamps include information registered electronically. It can be read with a special device, through which to ensure that the excise tax is paid on tobacco and its locally traded products.

The authority indicated that the system works according to a specific and deliberate mechanism, as digital tax stamps include “distinctive marks”, advantages to limit trade in illicit tobacco products. The port of entry into the country, with the supplier submitting the declaration form, and then the tax stamp fees will be paid when the suppliers request them, and by this, all tax stamps will be registered, and they will be tracked through a central database.

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