FTA scheme on tobacco en­sures trans­parency

The Gulf Today - Business - - FRONT PAGE -

ABU DHABI: The Fed­eral Tax Au­thor­ity (FTA) has reaf­firmed that Cab­i­net De­ci­sion No. (42) of 2018 on Mark­ing Tobacco and Tobacco Prod­ucts es­tab­lishes an ac­cu­rate and ef­fec­tive con­trol sys­tem, al­low­ing FTA to ef­fi­ciently col­lect taxes, en­sure trans­parency and com­bat tax eva­sion.

The scheme is set to be im­ple­mented in col­lab­o­ra­tion with the rel­e­vant au­thor­i­ties to en­sure a sin­gle in­te­grated set of pro­ce­dures is rolled out, guar­an­tee­ing the pro­tec­tion of rights and re­spon­si­bil­i­ties of Tax­able Per­sons, as well as en­sur­ing trans­parency with re­gards to the pro­ce­dures that reg­u­late their re­la­tion­ship with FTA.

FTA reaf­firmed that tobacco sup­pli­ers must abide by the new scheme to avoid the ad­min­is­tra­tive penal­ties, which could in­clude a ban on non-com­pli­ant busi­nesses, pre­vent­ing them from ex­er­cis­ing any com­mer­cial ac­tiv­ity un­til they com­ply fully with the sys­tem, which goes into ef­fect at the be­gin­ning of 2019.

The FTA re­vealed that an­other de­ci­sion is ex­pected to be is­sued by the Cab­i­net de­tail­ing the ad­min­is­tra­tive penal­ties im­posed on vi­o­la­tions of the pro­ce­dures, in­clud­ing fines im­posed on a per­son who pos­sesses ex­cise goods that do not carry dig­i­tal stamps, or who per­mits the use of his/her fa­cil­i­ties to sell such prod­ucts.

TAX LEG­IS­LA­TION

FTA as­serted that penal­ties will also be im­posed on per­sons who tam­per with the stamps placed on these goods, or per­sons who print on top of them. Fur­ther­more, penal­ties will be im­posed on per­sons who fail to de­clare the trans­fer of ex­cise goods, as well as on per­sons who fail to com­ply with the safe-stor­age re­quire­ments for the stamps; per­sons who un­der­take un au­tho­rised trad­ing, ex­change, sale or sup­ply of stamps; and Per­sons who re-use pre­vi­ously used stamps. FTA Di­rec­tor-gen­eral Khalid Ali Al Bus­tani said: “Cab­i­net De­ci­sion No. (42) of 2018 On Mark­ing Tobacco and Tobacco Prod­ucts com­ple­ments the UAE’S tax leg­is­la­tion in­fra­struc­ture, which is one of the most ad­vanced in the world. It was de­vel­oped fol­low­ing ex­ten­sive stud­ies and of­fers sim­ple pro­ce­dures to help busi­nesses com­ply with tax obli­ga­tions.”

“The UAE is the first coun­try in the re­gion to im­ple­ment a Dig­i­tal Tax Stamp Scheme for tobacco prod­ucts — the most ad­vanced of its kind in the world,” he added. “The sys­tem of­fers an in­no­va­tive so­lu­tion for com­bat­ting tax eva­sion and fa­cil­i­tat­ing in­spec­tion and con­trol at cus­toms and mar­kets; it pre­vents the sale of tobacco prod­ucts where Ex­cise Tax has not been set­tled. Dig­i­tal tax stamps are placed on the pack­ag­ing of tobacco prod­ucts and reg­is­tered in the FTA’S data­base; they con­tain taxre­lated data that can be read us­ing spe­cial de­vices.” In a press re­lease is­sued to­day, the Au­thor­ity ex­plained that the Cab­i­net De­ci­sion out­lined the pro­ce­dure to be fol­lowed to ap­ply the stamps on tobacco prod­ucts and in­di­cate that the due Ex­cise Tax has in­deed been paid. The stamps must be ap­plied on spe­cific prod­ucts, and in the ex­act po­si­tion de­ter­mined by the Au­thor­ity, which was also au­tho­rised to de­ter­mine cases where the stamps are not re­quired. The De­ci­sion stip­u­lates that the stamps are to be placed onto Ex­cise goods (af­ter pack­ag­ing) at the fa­cil­ity where they are pro­duced (if man­u­fac­tured in the UAE), or at a lo­ca­tion out­side the coun­try prior to im­port­ing them.

SHAPE OF THE STAMP

Ac­cord­ing to the Cab­i­net De­ci­sion, the Au­thor­ity can de­ter­mine the shape of the stamp and the con­di­tions for ap­ply­ing it, this in­cludes deter­min­ing the cases where no stamp is re­quired, the method of plac­ing the stamp and its lo­ca­tion on the Ex­cise good in ques­tion.

The de­ci­sion spec­i­fies that the stamps must be placed on the Ex­cise goods at the fa­cil­ity where they are man­u­fac­tured if they are made in the UAE, fol­low­ing the pack­ag­ing process, or at a lo­ca­tion out­side the UAE if they are im­ported.

As for the pro­ce­dures sur­round­ing the sup­ply of the stamps, the De­ci­sion re­quires the im­porter or lo­cal pro­ducer to is­sue an or­der to pur­chase the stamps ac­cord­ing to pro­ce­dures pre­de­ter­mined by the Au­thor­ity, in­di­cat­ing that the ap­proved sup­plier must sup­ply said stamps to the im­porter or lo­cal pro­ducer in ac­cor­dance with pro­ce­dures agreed upon be­tween the ap­proved sup­plier and the FTA.

Al Bus­tani says the UAE is the first coun­try in the re­gion to im­ple­ment a Dig­i­tal Tax Stamp Scheme on tobacco prod­ucts.

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