Illicit Excise Goods in Dubai: Fines, Digital Tax Stamps and What Shops Must Check

Direct answer. Selling, storing or holding cigarettes, heated cigarettes or water pipe tobacco without a digital tax stamp in Dubai can cost AED 50,000 plus 50% of the excise tax due. That fine is set by Cabinet Resolution No. 33 of 2019. Deliberate tax evasion on any excise good can also lead to prison and a fine of up to three times the tax evaded, under Federal Decree-Law No. 28 of 2022 on Tax Procedures. The Federal Tax Authority (FTA) assesses the administrative fines and often inspects with Dubai Police. A criminal case can start only on a written request from the FTA's Director General. This guide covers what counts as illicit, which goods carry stamps, the penalties, and what a shop owner should check.

"Illicit excise goods" is a common phrase, not a defined legal term. No official text we found defines it. In this guide it means excise goods sold, held or moved without the tax paid, or tobacco without its required stamp.

What are excise goods in the UAE?

Excise goods are products the UAE taxes because they are harmful to health: tobacco, vapes, energy drinks and sweetened drinks.

From 1 January 2026, Cabinet Decision No. 197 of 2025 lists five categories: tobacco and tobacco products, e-smoking liquids, e-smoking devices and tools, energy drinks and sweetened drinks. It also sets the rates below. It repealed Cabinet Resolution No. 52 of 2019, the earlier decision that listed carbonated drinks as a separate category. A fizzy drink with added sugar or sweeteners now generally falls under sweetened drinks. At the time of writing, the UAE government portal's excise page still showed the older six-category list. You can read Cabinet Decision No. 197 of 2025 on LEXAI.

Drinks sweetened only with artificial sweeteners fall under a separate row; check Cabinet Decision 197 of 2025.

The 2026 sugar-content model for drinks

The old flat 50% rate on sweetened drinks gave way to a tiered model on 1 January 2026. The FTA's December 2025 announcement says tax per litre now depends on the sugar and other sweeteners per 100 ml.

Producers, importers and stockpilers must obtain a conformity certificate for sugar content and submit it to the FTA. Without it, the FTA says the drink is classified in the high-sugar category until a laboratory report shows otherwise. A shop that stocks drinks should ask its supplier whether the product is registered.

Tobacco has a price floor too

For tobacco and e-liquids, the excise price cannot fall below a floor set by Cabinet Decision No. 137 of 2026, effective 1 September 2026. The floor is AED 0.4 per cigarette, AED 0.1 per gram of water pipe tobacco and AED 1 per ml of e-liquid. The excise price is otherwise the higher of the FTA's published price or the retail price less the tax in it.

What counts as an illicit excise good?

An excise good turns illicit when tax was not paid on it, or when tobacco lacks the mark that proves payment.

The Excise Tax Law (Federal Decree-Law No. 7 of 2017, as amended) taxes four activities: producing goods in the UAE, importing them, releasing them from a designated zone, and stockpiling them in the course of business. A "stockpiler" is a person who owns excise goods and cannot show that tax was already paid on them.

That last point matters for shops. If you hold stock and cannot show the tax was paid, the law may treat you as a stockpiler with your own tax duty. The detailed conditions sit in the Executive Regulation, so confirm them for your stock.

Article 23 of the Excise Tax Law lists conduct treated as tax evasion, including:

• bringing excise goods into or out of the UAE without paying the due tax, in part or in full;
• producing, transferring, acquiring, storing, transporting or receiving goods whose tax was unpaid, intending to evade it;
• placing false distinguishing marks on excise goods;
• submitting false or counterfeit documents, returns or records.

In practice, the FTA describes the same problems in its own announcements: hidden consignments, tobacco without stamps, and drinks with unpaid excise tax.

How does the digital tax stamp work?

The digital tax stamp is a registered mark on tobacco packs that lets an inspector confirm the tax was paid.

Article 24(2) of the Excise Tax Law lets the Cabinet choose which excise goods must be marked. Cabinet Resolution No. 42 of 2018 set up the marking scheme for tobacco. The FTA's implementing decision, FTA Decision No. 3 of 2021, names the goods that must carry a stamp: all types of cigarettes, electrically heated cigarettes, and water pipe tobacco.

Two points follow from this:

• Vapes, e-liquids, energy drinks and sweetened drinks do not carry the digital tax stamp. They are still taxed and must still be registered with the FTA, but the stamp rules and the stamp fines below apply to the three tobacco categories.
• The FTA's cigarette page states that no cigarettes may be held out for sale, imported or produced in the UAE unless they carry a stamp.

How a stamp is issued and checked

Only UAE manufacturers and importers apply for stamps, through the FTA's Digital Tax Stamps Request service. They must be registered for excise tax. The page lists a fee of AED 0.084 per stamp, charged by the service provider. Under Cabinet Resolution 42 of 2018, only the approved supplier may supply stamps, and nobody else may trade, exchange, sell or supply them.

After the FTA's 2022 Dubai operation, it explained that each stamp is registered in its database and stores information that an inspector reads with a special device. A retailer cannot "fix" a missing stamp. The stamp goes on at the factory, or before import.

What are the fines for unstamped tobacco?

The administrative schedule in Cabinet Resolution No. 33 of 2019 sets the main fines for stamp violations, with the largest at AED 50,000 plus 50% of the tax due.

You can read the full schedule in Cabinet Resolution No. 33 of 2019 on LEXAI. It is the administrative layer: the FTA assesses these fines without a court.

Article 3 of the resolution adds that a fine does not remove the duty to pay the tax itself. A person can object to a fine using the procedure in the tax procedures framework. The mirror shows no amendments, but the Cabinet can change the schedule, so confirm the current figures on the FTA website before relying on a number.

Fines for other excise rules

Other excise rules carry their own fines in Cabinet Decision No. 40 of 2017, as consolidated by the Ministry of Finance. Table 2 covers excise tax. A taxable person that fails to display prices inclusive of tax faces AED 5,000. Failing to give the FTA its price lists costs AED 5,000 the first time and AED 10,000 on repetition. Breaching the conditions for moving goods between designated zones is the higher of AED 50,000 or 50% of the tax on the goods.

If a drink or vape is on sale without tax paid, the stamp schedule does not apply. The FTA would instead assess the unpaid tax and the penalties under the tax laws. We did not find a fixed fine for that case in the sources we read, so treat any figure you are quoted with caution.

Can illicit excise goods lead to criminal charges?

Yes, when the conduct is deliberate tax evasion; mere error is normally an administrative matter.

Federal Decree-Law No. 28 of 2022 on Tax Procedures, Article 25, sets the criminal range. For deliberate tax evasion, the court can impose a prison sentence and a fine of not less than the tax evaded and not more than three times it, or either of them. The same article carries a fine of up to AED 1,000,000, with or without prison, for deliberately giving the FTA false information or documents, hiding or destroying required records, or obstructing its employees.

Five further rules shape how a case runs:

• A criminal case can only start on a written request from the FTA's Director General (Article 26).
• People who took part in the evasion are jointly liable for the tax and administrative penalties.
• A repeat offence within five years of a final judgment counts as an aggravating factor.
• A criminal judgment does not cancel the duty to pay the tax and administrative penalties.
• Refusing to pay an administrative fine already imposed can itself carry prison and/or a fine of one to three times the fine (Article 25(3)).

If you are under investigation, the details of your own file matter far more than any general guide. A lawyer can explain how the settlement and court stages apply to you. See how a criminal case begins in the UAE.

What happens during inspections and seizures in Dubai?

FTA inspectors, often with Dubai Police, scan stock, check registration and seize goods that fail. Under Article 26 of the Tax Procedures Law, a court can order confiscation on conviction. In its announcements, the FTA has reported seized goods as confiscated, and in a July 2025 case as permanently confiscated.

The FTA publishes these results on its news pages. A few examples show the pattern:

In the July 2025 case the FTA said the goods were permanently confiscated, a tax assessment was made, fines were applied and legal action was taken. We found no Dubai Customs or Dubai Economy and Tourism excise-specific inspection data, so we do not attribute any to them here.

What happens to seized goods

FTA Decision No. 7 of 2026, effective 30 July 2026, covers perishable or deteriorating seized goods. The FTA may sell them at public auction if the owner does not retrieve them after settling the full tax, penalties and expenses. Where goods are tied to an investigation or court case, the FTA first needs the approval of the public prosecution or court. The decision applies only to goods that may legally be sold in the UAE, so it does not tell you what happens to unstamped tobacco.

What should a Dubai retailer or importer check?

Check three things before stock goes on the shelf: the mark, the registration and the paper trail.

For a shop, the safest approach is simple. Buy from suppliers who can show you the tax was paid, and keep the proof. The list below is a practical checklist built from the official rules above, not a guarantee against a fine.

• Tobacco packs: every pack of cigarettes, heated cigarettes and water pipe tobacco should carry a digital tax stamp. Do not accept packs without one, and never alter or reuse a stamp.
• Supplier documents: keep invoices and delivery notes that identify the importer or producer. If you cannot show tax was paid, you risk being treated as a stockpiler.
• Drinks: ask the supplier whether the product is registered with the FTA and has its sugar-content certificate. The tier decides the tax.
• Vapes and e-liquids: confirm tax was paid. Separate health and licensing rules also apply, and they are outside this guide.
• Price display: if you are registered, or required to register, for excise tax or VAT, display prices inclusive of tax. The administrative fine for not doing so is AED 5,000 under each regime.
• Premises: do not let anyone else sell unmarked goods from your shop. The schedule fines deliberate permission.
• Records: importers and producers must keep stock and movement records, and declare tobacco movements in the FTA's system.

If you are an importer, also read customs duty exemptions in the UAE and VAT registration and deregistration, since excise, customs and VAT run side by side. If you sell through a trading company, see the general trading licence guide for which activities need extra approvals.

How is this different from counterfeit goods?

Counterfeit goods infringe a brand; illicit excise goods dodge tax. The two can overlap.

A counterfeit cigarette pack can also lack a genuine stamp, so a seizure can involve both. The FTA's Director General has linked smuggling to counterfeit excise products that do not meet UAE quality standards. Consumer and brand remedies are a separate topic, covered in counterfeit products in the UAE.

What should you do if the FTA has fined or seized your goods?

Read the assessment, keep every document, and use the objection route within the time stated on it.

Cabinet Resolution 33 of 2019 allows an objection to its fines, following the tax procedures framework. The deadline and steps are in the notice and in the Tax Procedures Law and its Executive Regulation (Cabinet Resolution No. 74 of 2023), so check them against your own notice. Under Article 26(5) of the Tax Procedures Law, the owner may ask for seized items back after paying the full tax, administrative fines and expenses. Getting goods back does not make unstamped tobacco legal to sell. Do not move, sell or dispose of seized goods yourself, and do not sign a statement you do not understand.

This article is general information, not legal advice. Your own facts, the goods involved and the current figures may change the answer. If you need advice on your own situation, you can find a lawyer on LEXAI.