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, next year, and the sale of these cigarettes will be banned from August 1.
Cigarettes are first to be targeted but the scheme will be extended to all other tobacco products in the coming months. The Federal Tax Authority (FTA) announced the new measure on Wednesday. Khalid Al Bustani, director general of the FTA, said the system will support efforts 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,” said Mr Al Bustani. 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 last year and since then, it is believed that half of the smoking population have turned to illegal cigarettes.
It is thought that smugglers manipulate documents, mis-declare goods and disguise the origin of illicit cigarettes to reach the market here. It is also thought that some of these cheap whites are manufactured in the county's free zones.
"Manufacturing facilities in the UAE free zones are producing cheap whites without the packaging health information that 98 per cent of countries have," said Tamer Shabana, director Illicit Trade Prevention at Philip Morris Middle East, an American multinational cigarette and tobacco manufacturing company.
"We also complete empty packet surveys to see what cigarettes are being smoked, and we know illicit whites now cover 50 per cent of the UAE market."