Officials at the Ministry of Finance have introduced a new excise stamp management directive in a bid to combat illicit trade and enhance tax collection.
The directive mandates the use of digital or physical excise stamps on a range of goods, including alcoholic beverages, tobacco products, and bottled water, as officials look to ensure proper tax compliance. They hope to create a robust excise assurance system that will facilitate the enforcement of excise tax laws, enhance transparency and accountability, and track and trace the production and distribution of excisable goods.
The Ministry is hoping that the implementation of excise stamps will contribute to the proper collection of excise tax and prevent illicit trade.
According to the directive, excise stamps must be affixed to compounded spirits, alcoholic and non-alcoholic beer, wines, fortified wines, ready-to-drink alcoholic products, cigarettes, tobacco products, bottled water, and non-alcoholic, carbonated beverages, including sugar-sweetened beverages, with the mandate to retain the right to specify additional goods requiring excise stamps in the future.
The directive outlines specific requirements for excise stamps including the incorporation of a Unique Identifier (UI) to deter counterfeiting, facilitating the tracking of stamps and excisable goods along the supply chain, and enabling the verification of stamp authenticity.
- Advertisement -"The stamps must comply with the ISO/IEC 15459-2:2015 standard and should be designed to allow the recording of movements of excisable goods throughout the supply chain," it reads.
The Ministry is expected to outsource the issuing and printing of excise stamps to a private business, which will be required to conduct its duties based on instruction and approval from tax authorities. Importers will be required to provide the issuer with proof of the import of excisable goods along with an application for a batch of stamps.
The issuer will also be beholden to confidentiality laws that would keep it from divulging business secrets it might acquire during its contract period. The Ministry may require the issuer to post a bond to assure that confidentiality is maintained, according to the directive.
The directive also details the application process for excise stamps.
It obliges manufacturers and importers of excisable goods to apply to the relevant authority at least 60 days before manufacturing or importing the goods, with the authority required to act on the application within five working days from the submission of a complete application.
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"Excise stamp fees, to be charged for each type of excisable goods, must be paid to the company designated to provide unique identifiers and print the stamps," reads the directive.
The directive mandates that excise stamps be affixed at specific points in the supply chain. It instructs that stamps be affixed to locally manufactured goods immediately after packaging at the production facility while stamps must be attached at the customs post or a designated location before clearance for imported goods. The tax authority may allow stamps to be affixed at the production facility in the exporting country under specific conditions, according to the directive.
The directive also sets provisions that manufacturers or importers must return any unused stamps to the tax authority if they stop manufacturing, if there are defects in the stamps, or if there is a discrepancy between declared and verified imports.
According to the directive, the company must refund the excise stamp fees within 90 days of the return.
"Any person who contravenes the provisions of the directive will be liable to penalties provided under the Excise Tax Proclamation or the Tax Administration Proclamation," reads the directive.
