Dubai: Compliance with UAE’s excise and value-added tax (VAT) laws has more than doubled in the first six months of the year, but violations have also surged, according to the Federal Tax Authority (FTA).
During this period, the regulator found 30,710 establishments to be compliant with tax policies, an 111 per cent increase from the 14,540 in the same period last year. Violations, on the other hand, jumped from 1,740 to 6,210, a 256 per cent increase.
Between January and June 2024, the FTA conducted 40,580 field inspections in 109 campaigns across the country. This represents a significant increase from the 17,310 inspections carried out in 105 campaigns during the same period in 2023.
Products confiscated
The FTA has also confiscated 7.26 million products that did not meet tax obligations in the first half of the year. This included 5.52 million packs of tobacco and 1.74 million non-compliant units of other excise goods, such as soft drinks, energy drinks, and sweetened beverages.
Khalid Ali Al Bustani, director-general of the FTA, asserted that the Authority is making intensive efforts to enhance market oversight, ensure compliance with tax legislation, and prevent the sale of contraband products in UAE markets.
“The Federal Tax Authority continuously strives to enhance rates of compliance with tax legislation and procedures, which clearly outline obligations for both the Authority and taxpayers, while ensuring full protection for consumers.”
Campaign success
Sara AlHabshi, executive director of the Tax Affairs Sector at the FTA, said the FTA relies on advanced electronic monitoring processes to prevent the sale, trade, or storage of products that do not meet excise or value-added tax obligations.
“These processes include the ‘Marking Tobacco and Tobacco Products Scheme’, which has seen continuous development since its launch more than five years ago. The Scheme requires Digital Tax Stamps to be placed on packages of tobacco products and recorded in the Authority’s database. Each stamp contains electronically registered information that can be read with a dedicated device used by authorised inspectors to ensure the tax due on these products has been paid.”
“All indicators confirm that the inspection campaigns conducted by the Authority have achieved positive results,” AlHabshi said.
