UAE: Over 3.5 million illegal excise goods found hidden in clothing shipments during major FTA raid in Dubai

TL;DR

• FTA seized over 3.5 million smuggled excise goods in Dubai.
  
  
• Hidden tobacco and beverage products carried AED 133.2M in tax liability.
  
  
  
• Advanced tracking tech and joint enforcement boosted the raid's success.
  

In a decisive move to curb tax evasion and protect consumers, a team from the Federal Tax Authority (FTA) seized more than 3.5 million illegal excise goods during a large-scale inspection operation at a facility in Dubai. The raid uncovered a sophisticated scheme involving fraudulently packaged tobacco and beverage products that were deliberately concealed and smuggled into the UAE market, according to a report by the Emirates News Agency (WAM) on Monday.

Smuggling Operation Concealed Within Clothing and Footwear Shipments
The illegal goods were found hidden within shipments labeled as clothing and footwear, an intentional attempt to bypass tax regulations and smuggle excise products into the country. The FTA described the activity as a clear violation of UAE tax laws, particularly those outlined in Federal Law No. 7 of 2017 on Excise Tax and its subsequent amendments.

All seized products have now been permanently confiscated. A detailed tax assessment was carried out, and significant fines have been imposed on the non-compliant entities. Legal proceedings are also underway.

Details of the Seized Goods and Financial Impact
According to the FTA, the operation uncovered a substantial cache of excise goods, with the total number of seized items exceeding 3.5
million. The breakdown of seized goods is as follows:

• 1.56 million packs of cigarettes
  
  
• 1.77 million packs of electronic smoking devices and accessories
  
  
• 111,360 packs of raw tobacco
  
  
• 4,000 packs of hookah tobacco
  
  
• 121 packs of nicotine pouches
  
  
• 4,600 packs of excise beverages
  
  

The total tax liability on these goods was calculated at AED 133.2 million($36.27 million), reflecting the scale of the attempted tax evasion.

FTA’s Technology-Driven Compliance Strategy
The Federal Tax Authority emphasized that this operation forms part of its ongoing, comprehensive monitoring efforts conducted in collaboration with relevant local and federal entities. The Authority continues to adopt advanced electronic control mechanisms, including the use of digital tax stamps on tobacco and tobacco-related products.

These stamps are embedded with electronically registered data, allowing FTA inspectors to verify that the correct excise taxes have been paid. This system is aligned with international best practices and is key to the UAE’s strategy for enforcing tax compliance.

The FTA reiterated that producers, importers, and stockists of excise goods must strictly adhere to the applicable tax regulations to avoid legal penalties, hefty fines, and confiscation of goods.

IN the UAE, excise goods, such as cigarettes, shisha tobacco, electronic smoking devices, e-liquids, are strictly regulated under Federal Decree‑Law No. 7 of 2017 and Cabinet Decision No. 52 of 2019, which impose excise tax rates of 50–100 % on these harmful products. Importing, concealing, or supplying them without valid digital tax stamps and proper registration is illegal and subject to heavy penalties

The Federal Tax Authority, a government entity established to manage tax affairs in the UAE, plays a critical role in overseeing the implementation, collection, and enforcement of taxes, and prevent illegal activities in the excise goods sector across all seven emirates Its mission includes promoting economic growth while ensuring effective, transparent tax compliance.