Tax liabilities worth AED74 million collected in Q1-21: FTA

ABU DHABI, 26th April, 2021 (WAM) -- The Federal Tax Authority, FTA, has conducted more than 2,707 field inspection visits in cooperation with the competent authorities through 35 inspection campaigns across UAE markets in the first quarter of 2021 (Q1-21), as part of its ongoing oversight efforts to protect consumer rights and increase the level of tax compliance.

FTA revealed that 256 Value Added Tax violations were detected and 248 violations with a total value of AED74 million during Q1.

FTA Director-General, Khalid Ali Al Bustani, confirmed that the sophisticated, cutting-edge tools adopted by the authority during inspections enable teams to accurately carry out their tasks through the latest field electronic mechanisms which correspond to best practices. This contributes to tightening controls on UAE markets to prevent the sale, circulation, and stockpiling of products that have not fulfilled their Excise or Value Added Tax (VAT) obligations.

Al Bustani said, "One of these tools is the ‘Marking Tobacco and Tobacco Product’ scheme, which went into effect on 1st January, 2019, in implementation of the Cabinet Decision No. (42) of 2018, which specified the requirement to place DTS on cigarette packs and tobacco products, including waterpipe tobacco and electrically heated cigarettes, after registering them in the FTA database. Each DTS contains data that can be read with a special device to make sure all taxes due on the products have been paid."

Al Bustani added, "The tax compliance rates that have been observed in the outcomes of the inspection campaigns carried out in the first quarter of 2021 highlight the success of the authority’s oversight efforts carried out in cooperation with the competent entities."

Sara Al Habshi, FTA Director of Tax Compliance and Enforcement Department, stated that more than 256 Value Added Tax violations were detected and 248 violations related to seizures in the category of "goods subject to Excise Tax" during the first three months of 2021, with a total value of AED74 million, comprised of 3.3 million cigarette packets and 58,200 kilogrammes of waterpipe tobacco products that did not bear Digital Tax Stamps, DTS, in addition to a total of 1,316 electronic smoking devices that were not registered in the Authority's electronic system.

Al Habshi noted, "During these inspection visits, other Excise Goods found in violation of Excise Tax laws amounted to more than 11,166 items, and included carbonated beverages, energy drinks, and sweetened drinks."

She continued, "The authority’s compliance rate in the commercial establishments covered by the inspection campaigns carried out during the first quarter of 2021 exceeded 77 percent, reflecting the remarkable improvement in tax compliance rates in the UAE’s markets."