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UAE bans Import of Cigarettes without New Digital Seal

April 01, 2019

The UAE is to ban the import and sale of cigarettes that do not have a new digital stamp, as authorities ramp up efforts to tackle tobacco smuggling and tax evasion.

Cigarettes that do not have a sophisticated digital seal will be banned from import from May 1, 2019, and the sale of these cigarettes will be banned from August 1, 2019. Cigarettes are first to be targeted but the scheme will be extended to all other tobacco products in the coming months in order to support the system to collect taxes.

The digital stamps that will be installed on the packaging of tobacco products include electronic information that can be read by a special device, through which the payment of the tax on these products is verified. Manufacturers and importers must place digital seals on cigarettes before the products leave the factory and from May 1, anyone caught flouting the rules will face harsh penalties.

The UAE levied a 100 per cent tax on tobacco in 2017 and since then, it is believed that half of the smoking population have turned to illegal cigarettes.

 1st Jan 2019

Importers will be able to order stamps to be sent to the Manufacturers for application to the pack of cigarette products.

 1st May 2019

No cigarette products without a digital tax stamp will be permitted to be imported into the UAE. Customs departments will undertake checks on products from this date and penalties for non-compliance may apply.

 1st August 2019

No cigarettes will be allowed to be stored, held out for sale, imported or produced anywhere in the UAE unless they carry a Digital Tax Stamp with end-to-end traceability. Penalties for non-compliance with this rule may apply. It would therefore be advisable for businesses to consider this final deadline date into their supply chain planning to ensure all unmarked products have been sold prior to this time.

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Combining a strong understanding of the business intricacies and comprehensive tax knowledge, we assist our clients with Excise-tax related needs. We stay abreast of the changing tax regime and explore new ways to meet our clients’ changing tax-related requirements.

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Last Updated: 1st April 2019

This article is contributed by:

CA Vipin  Kumar Ahuja

Senior Manager, Taxation


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