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|17 February, 2019

Phase 2 of FTA's tobacco scheme set to start in Q4

Expanded to cover tobacco products used in shisha, imported or produced and distributed locally

Image used for illustrative purpose. A man smokes a cigar while standing next to a window in Havana, January 20, 2005. HALTH REUTERS/Claudia Daut CD - RTRL33I

Image used for illustrative purpose. A man smokes a cigar while standing next to a window in Havana, January 20, 2005. HALTH REUTERS/Claudia Daut CD - RTRL33I

REUTERS/Claudia Daut CD - RTRL33I

The Federal Tax Authority (FTA) plans to launch phase two of the "Marking Tobacco and Tobacco Products Scheme" starting from Q4 2019, expanding it to cover tobacco products used in shisha, be they imported or produced and distributed locally.

The scheme is already in force on cigarettes, allowing for electronically tracking them from production and until they reach the end consumer, in order to ensure full compliance with excise tax laws on tobacco and tobacco products.

The scheme's first phase came into effect on January 1, 2019, covering all types of imported and domestically produced and distributed cigarettes. The digital marks were made available to producers and importers of all kinds of cigarettes to place on cigarette packs before they leave the factory to local markets, which allows them to ensure due excise tax has been paid. As of May 1, 2019, the import of any type of cigarettes into the UAE not bearing the digital marks will be prohibited; meanwhile, the sale of cigarettes packs not bearing the marks will be prohibited across UAE markets as of August 2019.

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Khalid Ali Al Bustani, director-general, FTA, said the UAE is the first in the region to implement the system, which seeks, first and foremost, to prevent tax evasion and support the authority's tax collection efforts in close cooperation with relevant authorities.

"This guarantees taxpayers' rights, enhances competitiveness, and promotes transparency in all transactions carried out with the FTA. The scheme presents innovative solutions to support inspection efforts at customs ports and markets to prevent the sale of products where due taxes have not been settled. The digital marks placed on the products contain accurate tax-related data that can be read with an advanced and dedicated device."

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