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: Starting from Sunday, the import to UAE of any tobacco water-pipes and electrically-heated tobacco products that are not bearing a Digital Tax Stamp (DTS) will be banned, the Federal Tax Authority (FTA) said on Saturday.

It comes as the second phase of the FTA’s ‘Marking Tobacco and Tobacco Products Scheme’ starts on Sunday.

Also, from June 1, the transport, storage and possession of such unmarked excise goods will be prohibited in all UAE local markets.

The scheme aims to utilise the latest digital solutions to boost the efficiency of tax control systems and support the UAE’s transition to a knowledge-based economy in line with the National Agenda, FTA said.

Phase one

Phase one of the scheme, which came into force on January 1, 2019, yielded “promising results” in marking all types of imported and locally manufactured and traded cigarette packets with DTS.

The FTA directed that such products be marked before leaving the manufacturing facilities to indicate the payment of the applicable excise tax across the UAE.

What about cigarettes?

As of May 1, 2019, the FTA issued a ban on importing all types of unmarked cigarette packets into the UAE. Following that, on August 1, 2019 the sale of cigarette packets not bearing a DTS was banned across all local markets.

Since the launch of Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products, the FTA rolled out a comprehensive scheme to ensure the “seamless implementation” of the decision. The scheme enables producers, importers and distributors of tobacco and tobacco products to purchase DTSs from the system operator through the FTA website, www.tax.gov.ae, to place them on the packaging of their products before they are released in local markets.

The FTA called on all concerned entities to comply with these regulations to avoid penalties.

Awareness campaign

The FTA launched an awareness campaign for the scheme targeting stakeholders in the UAE. The campaign included a workshop conducted by the system operator to familiarise the producers, importers and distributors of tobacco and tobacco products with the necessary requirements.

The FTA also held several meetings with relevant entities, including departments of economic development and local customs agencies, to strengthen its partnerships with all stakeholders across the government and private sectors, as well as ensure the successful implementation of the tax scheme.

The UAE is the “first country in the region” to adopt such digital solutions to protect consumers from commercial fraud and low-quality products, mitigate health and environmental risks and combat tax evasion.

Protecting rights

The scheme enhances the FTA’s ability collect taxes, in cooperation with relevant entities, through standardised regulatory procedures that protect the rights of taxable persons and ensures their compliance, as well as boosts competitiveness and transparency across all of FTA’s dealings.