The Federal Tax Authority (FTA) has intensified its oversight activities across local markets, in collaboration with relevant entities, to combat tax evasion, protect consumer rights, and ensure compliance with tax legislation and procedures.
The Authority issued a press statement revealing that it carried out 40,580 field inspection visits through 109 campaigns in markets across all the emirates during the first six months of 2024, up from the 17,310 visits conducted through 105 campaigns in the same period of 2023, marking a 134 percent increase in visits and a 4 percent growth in the number of campaigns.
The FTA noted that these visits aim to ensure all taxpayers comply with tax laws, particularly in terms of issuing tax invoices for sales, displaying full prices inclusive of tax, paying due taxes on products traded in UAE markets, and flagging cases of tax evasion or any other tax violations.
Khalid Ali Al Bustani, Director-General of the FTA, asserted that the Authority is making intensive efforts to enhance market oversight, ensure compliance with tax legislation, and prevent the sale of contraband products in UAE markets.
“The Federal Tax Authority continuously strives to enhance rates of compliance with tax legislation and procedures, which clearly outline obligations for both the Authority and taxpayers, while ensuring full protection for consumers,” Al Bustani noted.
“The Authority’s ongoing close collaboration with its strategic partners, including all relevant federal and local entities, is a key requirement for continuously enhancing the efficiency of inspection activities, expediting them, and expanding their scope to cover all regions of the UAE,” Al Bustani explained, noting that these partnerships facilitate information exchange and enhance access to the advanced capabilities present across all relevant entities, including human competencies, logistical support services, and tracking systems that comply with the highest standards.
Sara AlHabshi, Executive Director of the Tax Affairs Sector at the FTA, said, “The inspection visits carried out by the Federal Tax Authority rely on advanced electronic monitoring processes to prevent the sale, trade, or storage of products that do not meet Excise or Value Added Tax obligations.
These processes include the ‘Marking Tobacco and Tobacco Products Scheme’, which has seen continuous development since its launch more than five years ago. The Scheme requires Digital Tax Stamps to be placed on packages of tobacco products and recorded in the Authority’s database. Each stamp contains electronically registered information that can be read with a dedicated device used by authorised inspectors to ensure the tax due on these products has been paid.”
“All indicators confirm that the inspection campaigns conducted by the Authority have achieved positive results,” AlHabshi continued. “The inspection visits conducted in the first half of 2024 reported 6,210 violations, up from the 1,740 violations detected in the same period of 2023, marking an increase of 256 percent.
Moreover, the number of compliant establishments verified roughly doubled to 30,710 establishments, up from 14,540 compliant establishments verified in H1 2023, an increase of 111 percent. This indicates a noticeable improvement in compliance levels, driven by the Authority’s successful oversight efforts and tax awareness campaigns.”
The Federal Tax Authority reported that with regards to Excise Goods, inspection campaigns across UAE markets managed to seize and confiscate 7.26 million non-compliant products in the first six months of 2024, compared to just 8.89 million products seized during the same period in 2023.
This included 5.52 million packs of tobacco and tobacco products that were found to be in violation of tax obligations, up from 7.92 million non-compliant packs seized in the first half of 2023. Additionally, 1.74 million non-compliant units of other Excise Goods, including soft drinks, energy drinks, and sweetened beverages, were seized, compared to 971,690 units seized in the first six months of 2023.
Furthermore, 1,330 registration notices were issued to non-registered establishments that failed to comply with their obligations, compared to just 573 such notices issued in the same period of 2023.
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