Shisha is a water pipe made of clay, ornately carved metals or plastics, which enables smoking flavoured tobacco as it is bubbled through water. Image Credit: Gulf News archives

Abu Dhabi: The Federal Tax Authority (FTA) has issued a decision to postpone the implementation of the ban on supplying, transferring, storing and possession of waterpipe tobacco (known in Arabic as ‘Mu’assel’) and electrically heated cigarettes in the UAE that do not carry Digital Tax Stamps until January 1, 2021.

The ban had previously been scheduled to come into effect on June 1, 2020, in keeping with the timeline set for launching phase two of the ‘Marking Tobacco and Tobacco Products Scheme’, which seeks to protect consumers from commercial fraud and low-quality products, limit negative impact on public health and enhance control systems set up to combat tax evasion.

In a press statement issued today, the FTA explained that the extension of the timeline for phase two of the scheme was to address the challenges posed by the current conditions, which prevent certain producers, importers, distributors, and stockpilers of waterpipe tobacco and electrically heated cigarettes from meeting the previously set deadlines. Authorities had implemented strict precautionary measures to curb the spread of COVID-19, including temporarily closing cafés and restaurants and banning them from serving waterpipes.

FTA Director General Khaled Ali Al Bustani asserted that the FTA’s decision to postpone the ban on supplying, transferring, storing, and possessing the tobacco products without digital stamps as designated in phase two of the ‘Marking Tobacco and Tobacco Products Scheme’ until January 1, 2021, aims to give producers, suppliers and distributors of waterpipe tobacco and electrically heated cigarettes enough time to sort out any issues and be able to seamlessly implement the scheme.

“This extension on the timeline provides them with seven additional months to prepare for the mandatory implementation of the ban,” he said. “It also comes in response to the concerns expressed by stakeholders in the tobacco sector, and their requests for such an extension that would allow them to sort out any issues resulting from the current difficult circumstances and the necessary precautionary measures that were enforced to prevent the spread of the novel Coronavirus. The decision provides them enough time to sell off any remaining tobacco products that do not carry the Digital Tax Stamps.”

“The FTA has consulted all relevant business sectors, as well as the operator of the scheme’s electronic system, and reassured all stakeholders that it fully understands the difficulties brought on by the current crisis, asserting its commitment to minimising the impact of the ban on businesses, and encouraging them to comply with tax procedures and legislation,” Al Bustani concluded, noting that the FTA is dedicated to coordinating with its government and private-sector partners to ensure an efficient and seamless implementation of tax systems.

The importation of waterpipe tobacco and electrically heated cigarettes that do not carry the Digital Tax Stamps was banned on March 1, 2020 as part of phase two of the ‘Marking Tobacco and Tobacco Products Scheme’.

The FTA called on all producers, importers, and distributors of tobacco and tobacco products, as well as all stakeholders in the sector to abide by Cabinet Decision No. 42 of 2018 on Marking Tobacco and Tobacco Products. The Digital Tax Stamps allow for digitally tracking the designated products from the manufacturing facility until the products reach the end consumer, ensuring that set standards and criteria are satisfied and that Excise Tax obligations are met.