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Courtesy : Trade Arabia
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The Federal Tax Authority (FTA) has banned from January 1 the sale (supply), transportation, storage or possession of any type of water pipe tobacco or electrically heated cigarettes in the UAE unless they bear the Digital Tax Stamp (DTS). As per Cabinet Decision No. (33) of 2019, the Authority urged those concerned and affected by the decision to comply to avoid administrative penalties for violations of procedures related to the implementation of marking excise goods.

The DTS system helps the FTA improve its ability to collect excise tax charged on water pipe tobacco or electrically heated cigarettes in the UAE after being imported or manufactured locally, as well as strengthening control over these products and enabling stakeholders to analyse the supply chain to better control illicit tobacco product. In addition, the DTS system allows for the implementation of compliance standards by enabling the monitoring and tracking of compliant tobacco products.

Accordingly, the FTA reaffirms the need for all companies, manufacturers and suppliers of tobacco and tobacco products to comply with the system and to cooperate with the Authority to implement it accurately and effectively. The FTA explained that the DTS system facilitates inspection and control at customs outlets and local markets, in order to ban the sale of contraband products and combat commercial fraud.

The digital stamps will be placed on the packages of tobacco products and registered in the FTA database; the DTS contains data that can be read with a special device to make sure all taxes due on these products have been paid. The Authority indicated that the system operates on a specific mechanism, as the DTS features many advantages that contribute to combating the illicit trade of tobacco products. When orders are made for these stamps, they are sent to factories to be placed individually. This will ensure each package is tracked to the port of entry of each country, with the supplier submitting the permit form and the fees for the digital stamps for the digital stamps will be paid for when the suppliers make a request for them.

This will ensure all digital stamps are registered and tracked through a central database. The Authority mentioned that as of March 1, 2020, importing water pipe tobacco products and electrically heated cigarettes that do not carry digital tax stamps are banned, as part of implementing phase 2 of the ‘Marking Tobacco and Tobacco Product scheme.’

The scheme went into effect after the successful implementation of phase 1, which banned the sale (supply), transfer, storage or possession of all types of cigarettes that do not carry digital tax stamps in local markets.

As for applying for digital stamps, the FTA said that the manufacturer or supplier needs to download the application from the FTA website (tax.gov.ae/dts) and complete the required data. They are then required to send the request to (ftadtscustomercare@delarue.com) to receive a user name and password to log in to the (DLR) system.

The final step is to go to the ‘Manage Orders’ section where the DTS applicant will be able to record basic information to complete the application, including the target market (UAE market or duty-free).

Courtesy : Khaleej Times
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The app enables users to scan the stamps placed on tobacco products to verify and ensure that it is an authority accredited digital tax stamp

The Federal Tax Authority (FTA) has launched an innovative smart application that can be applied to check on the legality of trademarked tobacco products.

The smart application is designed to help consumers detect uncertified tobacco products by scanning the digital tax stamps placed on cigarette packages and tobacco products included in the ‘Marking Tobacco and Tobacco Products Scheme’, which went into effect at the beginning of 2019. The application also aims to ensure that these products meet the standard specifications, are not smuggled, and have been subjected to tax.

The app is part of the FTA’s on-going efforts to protect consumers from commercial fraud and combat tax evasion with various mechanisms and utilizing the latest technologies. Tax evasion and trade in inferior products and counterfeit goods are among the main challenges facing tax authorities around the world.

The authority said that the application has been instigated under the banner, “Monitor yourself, fight fraud”, adding that users can install the app, known as ‘FTA DTS’, on their smart phones via the Apple Store and Google Play.

The FTA explained that the application enables consumers to scan the stamps placed on the tobacco packages or tobacco products to verify and ensure that it is an authority accredited digital tax stamp. Should the consumer discover that the stamps are not accredited, they can file a report to the FTA directly from the smart application. The authority will then cooperate with the relevant authorities to take legal actions against violators.

Khalid Ali Al Bustani, director general of the Federal Tax Authority, said: “The ‘FTA DTS’ smart application is one of the effective tools that support the ‘Marking Tobacco and Tobacco Products Scheme’, which came into effect at the beginning of 2019 to combat tax evasion, protect public health and reduce the risks to consumers from the inferior products entering local markets. The FTA, through the new application, will offer consumers the opportunity to contribute to the control efforts aimed at protecting the markets from commercial fraud and inferior products, protecting public health, preserving the environment, promoting the concept of community partnership, and eliminating negative practices in local markets.”

The initiative to launch the ‘FTA DTS’ smart application for consumers of tobacco and tobacco products is part of the FTA’s effort to implement the Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products. Phase one of the ‘Marking Tobacco and Tobacco Products Scheme’ came into effect on January 1, 2019, on all types of imported and locally manufactured and traded tobacco products. On May 1, 2019, the FTA then issued a ban on importing all types of unmarked cigarette packets into the UAE. Following that, on August 1, 2019, the sale of tobacco products not bearing a DTS was banned across all local markets.

Courtesy : Khaleej Times
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The UAE’s Federal Tax Authority (FTA) on Sunday said Dh191.83 million worth of goods were confiscated last year due to violations of the local tax regulations.

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The seized goods were subject to excise tax.

The authority seized 9.4 million packs of cigarettes that didn’t carry the digital tax stamps; 14,000kg of Hookah tobacco products; and more than 803,000 packets of other selective goods, including soft, energy and sweetened drinks; electronic smoking devices and tools and liquids used in them.

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The products were seized during inspection campaigns in cooperation with the departments of economic development and private sector players.

The campaign is aimed at strengthening market inspections and also ensure compliance with legislation and tax procedures.

The FTA said implementation of excise tax has achieved many “remarkable successes” such as building a safe and healthy society by reducing the consumption of harmful goods.

Khalid Ali Al Bustani, Director-General of FTA, said the authority prioritises consumers’ protection from harmful products that do not meet the UAE’s regulations and standards while actively combating tax evasion.

“The FTA’s inspections rely on various field and electronic procedures that prevent the sale, circulation, and stockpiling of products that have not fulfilled their excise tax or value-added tax (VAT) obligations,” Al Bustani explained.

“These procedures include the ‘Marking Tobacco and Tobacco Products Scheme’, which went into effect on January 1, 2019, in line with Cabinet Decision No. (42) of 2018.

“The decision calls for the display of a Digital Tax Stamp on the packaging of tobacco products and registration in the FTA’s database. Each stamp contains data that can be read by special devices,” he added.