The UAE Federal Tax Authority (FTA) has significantly increased its on-the-ground enforcement efforts. In 2025, the FTA carried out approximately 176,000 field inspection visits across local markets in all seven emirates. This represents an 89% increase from around 93,000 visits in 2024.
The latest figures show the fourth consecutive year of strong growth in physical market inspections. They also highlight the FTA’s focus on combining on-ground enforcement with digital tax compliance tools.
The increase becomes even more notable when compared with previous years. FTA inspection visits rose from around 21,840 in 2022 to 39,470 in 2023, marking an 80.71% increase. Visits then nearly doubled to approximately 93,000 in 2024.
In 2025, inspections increased by another 89%, reaching around 176,000 visits. Overall, the number of physical FTA market inspections has grown more than sevenfold in just three years.
This sharp rise signals a stronger focus on tax compliance across UAE businesses. Companies should therefore ensure that their VAT, corporate tax, invoicing, and other tax records are accurate, complete, and up to date.
What the Inspections Found
The FTA’s specialised teams worked with relevant local authorities across the UAE to strengthen tax compliance during 2025. Their inspection activities identified tax dues and administrative penalties exceeding AED 608 million. This was up from AED 348 million in 2024, representing an increase of approximately 75%.
A significant part of the enforcement activity focused on excise goods compliance. The FTA’s Digital Tax Stamp scheme helps inspectors quickly verify whether certain products meet tax requirements. This makes it easier to identify non-compliant goods at the point of sale.
In 2025, FTA teams confiscated approximately 29.5 million non-compliant tobacco packs without the required Digital Tax Stamps. This was more than double the roughly 11 million packs seized in 2024, representing a 169% increase.
Inspectors also seized around 7.6 million non-compliant packs of other excise goods. These included carbonated drinks, energy drinks, and sweetened beverages. The figure increased by more than 90% from approximately four million packs in 2024.
In addition, stronger market monitoring helped the FTA identify several unregistered or non-compliant businesses. The authority issued formal registration notifications to help bring these businesses into the UAE tax system. Therefore, businesses should review their tax registration, product compliance, and supporting records regularly.
Leadership Commentary
Abdulaziz Al Mulla, Director-General of the FTA, said the Authority continues to strengthen its efforts to monitor local markets. The FTA works closely with relevant authorities across the UAE to support compliance with tax laws and regulations.
Sara AlHabshi, the FTA’s Tax Compliance Executive Director, also highlighted the Authority’s commitment to consumer protection. She said the FTA aims to prevent the sale of products that do not meet approved quality standards.
In addition, the FTA is working to combat tax evasion through the effective implementation of tax legislation. These efforts reflect the Authority’s continued focus on market monitoring, consumer protection, and tax compliance across the UAE.
How the FTA Is Finding Non-Compliance Faster
A key factor behind the FTA’s increased enforcement is its growing use of digital monitoring tools alongside physical inspection teams. Digital Tax Stamps on excise goods allow inspectors to verify product compliance quickly with handheld scanners. As a result, inspectors can check products without relying only on paperwork.
This technology-based approach has improved the speed and reach of market inspection campaigns. It also reflects a wider shift in the FTA’s operations. In 2025, the Authority increasingly used artificial intelligence and data analytics to identify potential areas of non-compliance. This helps inspection teams focus their resources where they may have the greatest impact.
The stronger enforcement also extends beyond market inspections. According to the FTA’s 2025 annual report, formal tax audits increased by 46% during the year. These audits are separate from market inspection visits and helped generate more than USD 1 billion in additional tax revenue.
Combined VAT and Excise Tax revenue reached AED 46 billion in 2025, compared with AED 41 billion in 2024. This represents a 15% increase, which officials attributed to economic growth and improved tax compliance.
Taken together, the inspection and audit figures show a clear trend. The UAE’s tax enforcement system is moving beyond development and into a more active, technology-driven enforcement phase.
Which Sectors Are Most Exposed
The FTA’s inspection programme covers markets across all seven emirates. However, the large number of tobacco and excise goods seizures shows that retailers, distributors, and importers dealing with excise-liable products remain a key focus.
Businesses that handle tobacco products, sweetened beverages, energy drinks, and other excise goods should prepare for continued inspections. Digital Tax Stamp verification allows FTA inspectors to check products quickly and identify missing or invalid stamps at the point of sale.
The wider message also applies to VAT-registered businesses. Market inspections can include checks on correct VAT treatment, proper invoicing, and tax registration status. Therefore, businesses should not assume that compliance checks only happen through formal tax audits.
As market inspections continue to increase, routine visits may identify compliance issues before a business faces a formal audit. Businesses should keep their VAT records, invoices, tax registrations, and other supporting documents accurate and up to date. Regular internal compliance reviews can also help identify and correct issues before an FTA inspection.
What This Means for UAE Businesses
For business owners, the 89% year-on-year increase in FTA inspection visits has a clear practical impact. The likelihood of an unannounced compliance check has increased significantly. At the same time, non-compliance can lead to penalties, seized goods, and reputational challenges.
Frequently Asked Questions
How many market inspection visits did the FTA conduct in 2025?
The FTA conducted approximately 176,000 field inspection visits across all seven emirates in 2025, an 89% increase from around 93,000 visits in 2024.
What did the FTA find during these inspections?
Inspection teams identified more than AED 608 million in tax dues and administrative penalties. They also seized 29.5 million non-compliant tobacco packs and 7.6 million packs of other non-compliant excise goods.
Which sectors face the highest inspection risk?
Retailers, distributors, and importers dealing in excise-liable goods, such as tobacco, energy drinks, and sweetened beverages, face greater scrutiny. Digital Tax Stamps allow FTA inspectors to verify these products quickly during market visits.
Are market inspections separate from formal FTA tax audits?
Yes. Market inspections are physical, on-site checks, while tax audits are a separate, typically desk-based enforcement process. The FTA increased both activities in 2025, with inspections rising by 89% and formal audits increasing by 46%.
Author:
NR Doshi & Partners, a leading audit firm in Dubai, advises UAE businesses in the retail, distribution, and import sectors on VAT and Excise Tax compliance. Our services include Digital Tax Stamp readiness and FTA inspection preparedness.
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