UAE's Federal Tax Authority Boosts Inspection Visits By 80% In Effort To Enhance Compliance

The Federal Tax Authority (FTA) of the United Arab Emirates has significantly stepped up its supervisory and inspection efforts in a concerted push to safeguard consumer rights, deter tax evasion, and promote adherence to tax regulations. Throughout 2023, the FTA executed an impressive 39,470 inspection visits across the UAE through 211 distinct campaigns, showcasing an 80.71 percent surge in visits and an 86.73 percent increase in campaigns compared to the previous year. This marked escalation underscores the Authority's commitment to reinforcing market oversight and ensuring compliance with the nation's tax laws and standards.

These intensified inspection activities are part of a broader strategy aimed at curbing commercial fraud and halting the distribution of inferior or counterfeit products that compromise consumer quality of life. The FTA's efforts in the past year have led to the confiscation of over 21.29 million units of non-compliant tobacco products lacking the mandatory Digital Tax Stamps. Additionally, authorities seized 2.45 million units of other non-compliant excise goods, including various beverages, highlighting the Authority's vigilance in enforcing tax compliance.

Khalid Ali Al Bustani, Director General of the FTA, emphasized the dual focus of the Authority's operations: enhancing tax compliance among taxpayers and protecting consumers from substandard goods. Al Bustani also highlighted the FTA's adherence to stringent inspection standards aligned with global best practices to ensure effective tax law implementation. He pointed out that these efforts are supported by advanced supervisory mechanisms, such as the 'Marking Tobacco and Tobacco Products Scheme', which plays a crucial role in verifying tax payments on tobacco products through Digital Tax Stamps.

The FTA's proactive approach extends beyond enforcement; it includes significant efforts to raise tax awareness among businesses and consumers alike. Through strategic partnerships with government and private sector entities, the Authority has successfully conducted workshops and seminars across all emirates, fostering a culture of compliance. These educational initiatives complement joint inspection campaigns, further solidifying the UAE's tax system.

Reflecting on the outcomes of these comprehensive inspection campaigns, the FTA reported a notable increase in compliant establishments in 2023, with figures rising to 32,710 from 18,230 in 2022—an increase of 79.41 percent. Conversely, the number of establishments found non-compliant with tax laws also rose to 4,390 from 2,570 in the previous year, indicating a 70.91 percent increase. Furthermore, enforcement actions have escalated, with 1,150 registration notices issued to non-compliant entities, up from 668 in 2022—a significant rise of 72.31 percent.

The Federal Tax Authority's rigorous inspection regime and educational outreach underscore its unwavering commitment to upholding tax laws and protecting consumer interests within the UAE. Through continuous development of supervisory mechanisms and strategic collaborations, the FTA aims to maintain a fair and compliant market environment for all stakeholders involved.

With inputs from WAM