The UAE’s Federal Tax Authority (FTA) has decided to postpone the implementation of the ban on supplying, transferring, storing, and possessing water pipe tobacco and electrically heated cigarettes that do not carry digital tax stamps within the UAE to January 1, 2021.
The ban was previously scheduled to come into effect from June 1, 2020, in line with phase two of the ‘Marking Tobacco and Tobacco Products Scheme’, the FTA said in a statement on Tuesday, reported official news agency WAM.
“This extension on the timeline provides them with seven additional months to prepare for the mandatory implementation of the ban,” said FTA director-general Khaled Ali Al Bustani.
“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 closed and hence there is an existing stockpile of water pipe 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 minimising the impact of the ban on businesses, and encouraging them to comply with tax procedures and legislation,” added Al Bustani.
The UAE banned the import of electric cigarettes and water pipe 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 banned across all local markets in the UAE as of August 1, 2019.
The scheme is designed to protect consumers from commercial fraud and low-quality products, limit negative impact on public health, and enhance control systems set up to combat tax evasion.
The digital tax stamps allow for digitally tracking the designated products from the manufacturing facility until the products reach the end consumer, ensuring that set standards and criteria are satisfied and that excise tax obligations are met.