The Federal Tax Authority (FTA) has intensified its supervisory efforts, in collaboration with various relevant entities, in a bid to protect consumer rights, combat tax evasion, and enhance tax compliance.

In 2023, the Authority carried out 39,470 inspection visits through 211 campaigns in local markets across all emirates of the UAE, marking an annual increase of 80.71 percent in the number of visits, as well as an 86.73 percent growth in the number of campaigns conducted, compared to 2022, which saw the FTA carry out 21,840 field visits through 113 inspection campaigns.

In a press statement issued today, the Federal Tax Authority asserted that these campaigns form part of its plans to enhance market control by intensifying inspection visits to markets across the country, in order to ensure compliance with tax laws, legislation, and procedures, in addition to combating commercial fraud and preventing the sale of sub-standard or counterfeit products that negatively affect quality of life.

The Authority explained that inspection efforts within the Excise Goods category last year resulted in the seizure of 21.29 million units of non-compliant tobacco products that were not marked with the Digital Tax Stamps. Meanwhile, 2.45 million non-compliant units of other Excise Goods, including soft drinks, energy drinks, and sweetened beverages, were also seized.

Khalid Ali Al Bustani, Director General of the FTA, said, “The Federal Tax Authority’s continuous supervisory efforts aim to enhance tax compliance, monitor taxpayers’ adherence to tax legislation in all of their transactions, combat tax evasion, and protect consumers from non-compliant Excise Goods that fail to meet the UAE’s strict quality standards. On that same note, the Authority is intensifying its awareness efforts in order to encourage and assist taxpayers – who we consider to be strategic partners – to ensure self-compliance.”

“The Federal Tax Authority adheres to strict inspection criteria, in line with international best practices, in order to ensure the seamless and effective implementation of tax laws and regulations, which clearly outline the obligations of all stakeholders in the tax system, ensure full protection for consumers, and enact precise measures to tighten market surveillance, in accordance with the highest standards of governance and transparency,” he added.

“The inspection operations that the Authority carries out rely on various field and electronic supervisory mechanisms to prevent the sale, trade, or storage of products that fail to comply with Value Added Tax (VAT) or Excise Tax regulations,” Al Bustani explained. “Among these mechanisms is the ‘Marking Tobacco and Tobacco Products Scheme’, which has undergone continuous development since its launch over five years ago. The Scheme consists of placing Digital Tax Stamps onto tobacco products and registering them in the FTA database. Each stamp contains electronically registered information that authorised inspectors can read using smart devices in order to verify that taxes related to these products have been paid.”

“The Federal Tax Authority has established strategic partnerships with relevant entities in the government and private sectors over the past few years, which has contributed significantly to the successful implementation of the tax system,” the FTA Director-General noted. “Through these partnerships, key objectives have been achieved, most notably raising tax awareness among business sectors and consumers with a series of workshops and awareness seminars held across all emirates, in addition to joint inspection campaigns, carried out in coordination with relevant entities to enhance compliance in the markets.”

The Federal Tax Authority explained that the market inspection campaigns revealed an increase in the number of compliant establishments verified in 2023 to 32,710, up from 18,230 in 2022, which marks an increase of 79.41 percent. Moreover, the number of registered establishments found to be non-compliant with tax laws increased to 4,390, compared to 2,570 in 2022, marking an increase of 70.91 percent. A total of 1,150 registration notices were issued to non-registered and non-compliant establishments, up from 668 in 2022, representing an increase of 72.31percent.