Digital Tax Stamp in UAE
Two types of Digital Tax Stamps were approved by the FTA, Red and Green, depending on the markets that the products are sold in Image Credit: Supplied

Abu Dhabi: From tomorrow, August 1, the sale and possession of all types of cigarettes not bearing the Digital Tax Stamps will be prohibited across UAE markets - the Federal Tax Authority (FTA) announced

Prohibiting the sale in local markets of cigarettes packets not bearing the Digital Tax Stamps is part of the timeline set for the ‘Marking Tobacco and Tobacco Products Scheme’, which went into effect at the beginning of 2019.

What does the tax stamp mean?

The scheme seeks to electronically track cigarettes packs from the production facility and until they reach the end-consumer, in order to protect consumers from low-quality products, combat tax evasion, and ensure that the Excise Tax due on these products has been settled.

This is as per Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products and FTA Decision No. (3) of 2018 on Implementing the Marking Tobacco and Tobacco Products Scheme.

“The Authority has sought to implement an integrated and widespread awareness campaign starting from the second quarter of 2018 – several months before the ‘Marking Tobacco and Tobacco Products Scheme’ went into effect – to allow sufficient time for local markets to prepare for the Scheme and avoid any adverse effects to their commercial activities,” FTA Director General Khalid Ali Al Bustani explained.

“Furthermore, the Authority collaborated with the system operator to carry out an extensive awareness campaign through its official website, social media accounts, newspapers, television, and radio. Workshops were organised, bringing together individuals and organisations involved in the manufacture and trade of tobacco and tobacco products, introducing them to the Scheme, and answering their queries.”

Red stamp and Green stamp

Two types of Digital Tax Stamps were approved by the FTA, the first of which is Red and meant to be placed on the packaging of tobacco products (including cigarettes) sold at all local markets, as well as at duty-free in arrival lounges.

The second type, meanwhile, is Green and earmarked for tobacco products sold at duty-free in departure lounges.

Appeal to customers

The FTA also appealed to consumers to check for Digital Tax Stamps on the packaging of cigarettes they buy and inform competent authorities of any violations, noting that the scheme serves to tighten controls on the market, ensure compliance with international best practices, verify that tax obligations have been met, and guarantee the quality and safety of tobacco products in the UAE.