Five Years Already! UAE Reflects on Excise Tax Success

In a press statement marking the fifth anniversary of the introduction of excise tax in the United Arab Emirates, the country’s Federal Tax Authority (FTA) hailed its implementation as an all-round success.

The tax came into effect in 2017, initially applied to carbonated beverages, tobacco products and energy drinks, and extending to sweetened drinks and e-cigarettes in 2019.

Under this new regime, the number of excise tax registrants grew from 309 in 2017 to 1,469 by September 2022, and the corresponding number of products registered as excise goods in the FTA database increased from 3,078 to 30,834.

The press statement confirmed that the continuous development of monitoring and control tools had contributed towards increasing tax compliance and raising the efficiency of inspection processes for tracing smuggled products. The most prominent of these tools was identified as the tax stamps used on tobacco and tobacco products.

The first phase of the tax stamp scheme went into effect at the beginning of 2019, with serialised stamps placed on cigarettes. From November 2019, the scheme expanded to all types of waterpipe tobacco and electronically heated cigarettes, in addition to regular cigarettes. Another step forward was then taken in 2021/22, with the transition towards new, redesigned tax stamps on all tobacco products traded in the UAE.

The FTA noted that the frequency of field inspection campaigns had also risen, with the number of inspection visits increasing from 5,031 in 2019 to 19,048 in 2021.

The tax authority concluded that the excise tax control procedures put in place, including the use of tax stamps, had boosted compliance among taxpayers.

Qatar launches tobacco stamps

In other news relating to the Gulf Cooperation Council (GCC) region, the Qatar General Tax Authority (GTA) has announced the launch of tax stamps on imports of cigarettes and other tobacco products and their derivatives.

According to a GTA statement, the import of cigarettes without valid and activated tax stamps will not be permitted from 13 October, while for other tobacco products the date is 3 November.

Then, from January 2023, cigarettes will not be sold or circulated anywhere in the country without valid and activated tax stamps.

The tax stamps are provided by De La Rue, which also provides stamps for the four other GCC countries with tax stamp regimes, namely Bahrain, Oman, Saudi Arabia, and UAE.