New excise stamp directive implemented to enhance tax compliance

A directive that requires excise tax collectors to stamp their merchandise is drafted by the Ministry of Finance (MoF). Additionally, the directive enforces that importers or producers create a system that interfaces with the tax office.

The excise tax proclamation 1186/2020 is the basis for its drafting, according to the directive that was released for comment.

Article 29, sub-article 1A of the 2020 proclamation stated that the MoF may, by directive, specify the excisable goods to which excise stamps shall be affixed.

According to the draft directive, spirits, tobacco, bottled water, alcoholic and non-alcoholic beers, cigarettes, and cigarillos must all have the excise stamp applied.

It added that the ministry shall include other goods.

According to experts, the ministry made the decision to issue the directive because it believed that all relevant importers and manufacturers were not correctly complying with tax collection requirements. They informed Capital that “it is also part of the implementation of expanding the tax base.”

The excise stamp shall be a paper stamp, digital stamp, or any mark that the Minister may approve for affixation or printing on excisable goods.

The draft directive stated that the Tax Authority shall specify the type, content, and the manner of affixing excise stamps.

According to the draft law, a manufacturer or importer of excisable goods shall apply to the Tax Authority for excise stamps in the prescribed form. “An application for excise stamps in accordance with sub-article 1 of this Article shall be submitted to the Tax Authority at least sixty days before the manufacture or importation of the excisable goods.”

The directive stated that the ministry shall appoint a company to carry out the printing and supply of excise stamps, to develop and install the system, and to install any other related systems.

It added that the excise stamps shall be affixed to manufactured goods at the production facility immediately after packaging and at the customs post or at a place determined by the Tax Authority within five days of the clearance for importation of the goods.

It added that the Tax Authority may allow excise stamps on imported excisable goods to be affixed at the production facility in the exporting country in accordance with such conditions as the Tax Authority may specify.

According to the directive, a manufacturer or importer of excisable goods shall facilitate the installation of the system, like excise stamps authentication and validation equipment, devices for identification and association of each package with an individual excise stamp, production accounting equipment, and devices for the control, registration, recording, and transmission of data on quantities of excisable goods which have been stamped to the Tax Authority.

“All packages of duty-free or export excisable goods specified in the proclamation shall bear distinct markings to enable the goods to be trackable and traceable,” the directive added for commodities that have duty-free incentives.

Article 39, sub-article 6 of the proclamation stated that any person who contravenes Article 29 of this Proclamation, which provides about excise stamps, commits an offense and is liable if convicted to imprisonment for a term of 3 to 5 years and a fine of 50,000 to 100,000.