According to reports, the upcoming implementation of excise stamps is anticipated to help eliminate illegal players in the beverage industry.
In alignment with the Excise Tax Proclamation 1186/2020, the Ministry of Finance (MoF) has recently drafted a directive for the management system of excise stamps, which will be applied to beverage products like bottled water and alcohol.
The preamble of the directive states that its objectives are to safeguard public health and safety, combat illicit trade, and ensure the integrity of excise tax collection systems.
Furthermore, it establishes a comprehensive framework for the management of excise stamps, covering the regulation, administration, and enforcement of excise duty obligations related to excisable goods.
The directive emphasizes the importance of proper affixation and tracking of excise stamps on excisable goods to maintain transparency, accountability, and compliance with the Excise Tax Proclamation.
Around a month ago, the MoF organized a consultation meeting with stakeholders. Experts in attendance indicated that there was generally an agreement reached regarding the proposed law, which is expected to be enacted soon.
As per the draft directive, excise stamps will be required for spirits, tobacco, bottled water, alcoholic and non-alcoholic beverages, cigarettes, and cigarillos. The ministry reserves the right to include additional goods.
The directive specifies that the excise stamp can be a paper stamp, digital stamp, or any approved mark for affixation or printing on excisable goods. The exact type, content, and manner of affixing the excise stamps will be determined by the tax authority.
The ministry is also required to designate a company responsible for developing and installing the excise stamp system, as well as printing and supplying the excise stamps and related systems.
Ashenafi Merid, the General Manager of the Ethiopian Beverages Manufacturing Industries Association (EBMIA), stated that the new program will put an end to any questionable and illegal bottling activities.
The head of a lobby group representing companies involved in bottled water, juice, and spirits recalled past investigations into illicit water bottling. He mentioned that such activities have significantly decreased and expressed confidence that the introduction of excise stamps will play a vital role in controlling and tracing illegal bottlers.
Ashenafi added that the excise stamp program will contribute to ensuring the safety and legality of the bottling industry. Illegal bottlers, he explained, will no longer be able to obtain stamps that distinguish their products from those produced lawfully.
The implementation of the new program is expected to commence after the technology supplier is selected through the bidding process conducted by the Public Procurement Service.
Experts anticipate that a foreign company with extensive industry experience will be chosen to supply the technology. The excise stamps are likely to be technology-based and easily readable, similar to QR codes.
Ashenafi stated that his organization has requested the inclusion of fruit juice products in the excise stamp program to address concerns about illicit packaging practices that negatively impact the market.
According to the proposed directive, excise stamps for locally manufactured products must be affixed at the manufacturing site immediately after packaging. For imported items, the stamps should be applied at the customs post or a location designated by the Tax Authority within five days of clearing customs.
The directive also allows for the possibility of applying excise stamps on imported excisable goods at the production site of the exporting nation, with certain restrictions imposed by the Tax Authority.
