The UAE’s Federal Tax Authority (FTA) has decided to delay the implementation of the ban on supplying, transferring, storing, and owning waterpipe tobacco and electrically heated cigarettes that do not display digital tax stamps within the UAE till January 1, 2021.
The ban was earlier scheduled to come into effect on June 1, 2020, in line with phase two of the ‘Marking Tobacco and Tobacco Products Scheme’, the FTA
“This extension on the timeline provides them with seven additional months to prepare for the mandatory implementation of the ban. It also comes in response to the concerns expressed by stakeholders in the tobacco sector, and their requests for such an extension that would allow them to sort out any issues resulting from the current difficult circumstances and the necessary precautionary measures that were enforced to prevent the spread of the novel coronavirus. The decision provides them enough time to sell off any remaining tobacco products that do not carry the digital tax stamps.”
As part of the COVID-19 pandemic, restaurants and cafes across the country were temporarily shut and hence there is an existing stockpile of waterpipe tobacco and electrically heated cigarettes in the UAE.
“The FTA has consulted all relevant business sectors, as well as the operator of the Scheme’s electronic system, and reassured all stakeholders that it fully understands the difficulties brought on by the current crisis, asserting its commitment to minimizing the impact of the ban on businesses, and encouraging them to comply with tax procedures and legislation,” added Al Bustani.
The UAE outlawed the import of electric cigarettes and waterpipe tobacco without ‘digital tax stamps’ from March 1. As part of the scheme’s initial phase, the sale or possession of unmarked cigarette packs was forbidden across all local markets in the UAE as of August 1, 2019.
The scheme is intended to shield consumers from commercial fraud and low-quality products, limit the negative influence on public health, and improve control systems set up to combat tax avoidance.
The digital tax stamps allow for digitally tracking the assigned products from the manufacturing facility until the products reach the end consumer, guaranteeing that set standards and criteria are fulfilled and that excise tax commitments are met.