The Federal Tax Authority has reported a significant increase in the number of on-site inspections conducted by its specialized teams, which, in collaboration with relevant authorities, reached approximately 176,000 inspections last year across local markets in all emirates. This marks an impressive annual growth of around 89% compared to the 93,000 inspections carried out in 2024, highlighting the authority’s commitment to enhancing its regulatory efforts to combat tax evasion, promote tax compliance, and safeguard consumer rights.
Abdulaziz Mohammed Al-Mulla, director general of the Federal Tax Authority, stated: “The authority continues its intensive efforts to actively contribute to the oversight of local markets in collaboration with relevant entities to ensure adherence to tax laws and procedures. The inspections carried out by the authority rely on various electronic regulatory mechanisms aimed at preventing the sale, trade, or storage of products that do not comply with the Value Added Tax (VAT) or Excise Tax regulations. Among these mechanisms is the ‘digital tax stamp system for tobacco and related products,’ which has undergone continuous development since its launch over six years ago. Digital tax stamps are affixed to tobacco product packaging and registered in the authority’s database, containing electronically recorded information that can be read by inspectors to ensure the tax has been paid on these products.”
Al-Mulla further emphasized that the results of the inspection campaigns conducted during 2025 confirm the success of the comprehensive regulatory plans being implemented effectively, as the authority intensifies its efforts to assist businesses in complying with tax regulations, viewing them as strategic partners to enable voluntary compliance and proficient engagement with the tax framework.
Sarah Al-Habshi, executive director of the tax compliance sector at the Federal Tax Authority, noted: “The authority is committed to protecting consumers from harmful products that do not meet the quality standards established within the country, while also working to combat tax evasion through the meticulous execution of tax laws and procedures that clearly outline the mutual obligations between the authority and taxpayers, prioritizing consumer protection through strict market oversight.”
The Federal Tax Authority has reported that its ongoing regulatory efforts led to the seizure of 29.5 million non-compliant tobacco product packages lacking “digital tax stamps” in 2025, a significant increase from around 11 million packages seized in 2024, representing a rise of 169%. Additionally, approximately 7.6 million packages of other excise goods, including soft drinks, energy drinks, and sweetened beverages, were confiscated, compared to about 4 million packages seized in the previous year, marking an increase of over 90%.
Moreover, the total value of tax liabilities and associated fines identified during inspections in 2025 exceeded 608 million dirhams, compared to 348 million dirhams in 2024, reflecting an increase of around 75%. Effective market oversight has been instrumental in uncovering numerous establishments violating tax laws, and notifications for registration were issued to non-compliant businesses.