Category / Tax stamp

by Mike Poverello

Tanzania – TRA uses app in bid to curb counterfeit stamps

The Tanzania Revenue Authority (TRA) in Kilimanjaro Region is now using a mobile phone application to confirm the genuineness of Electronic Tax Stamps (ETS) on spirits that are sold in some bars.

The application provides information on whether the ETS on the drink product was genuine or fake.

This follows a recent request by residents of Kilimanjaro and Arusha, asking the taxman to work with other state agencies to investigate the presence of fake tax stamps in the market.

The TRA  regional manager for Kilimanjaro, Mr Gabriel Mwangosi, said yesterday the fake stamps will soon become a thing of the past because the ‘special devices’ have the capacity to verify the fake and genuine ones. “Some traders are buying these stamps from the streets without knowing if they are genuine or not,” he said.

Adding: “We have found some of them buying ETS stamps, which are not recognised by the TRA system. This is a major reason for us to come up with a tool that can help curb fakes,” he noted.

The taxman is friendly with traders because the two depend on each other, cautioning that those using the fake stamps will face the law.

“We provide them (traders) with education to ensure that they fulfil their responsibilities of paying appropriate taxes and on time in order to avoid unnecessary penalties,” said Mr Mwangosi.

He stressed the ETS are mandatory for all traders, cautioning them to refrain from cheating.

“With these verifying devices, I can assure you (traders) and the resi-dents that no one will use fake stamps,” he noted.

Recently, TRA in Kilimanjaro Region reported to have arrested a man, Mr Kimario, in a deliberate effort to dismantle the network of individuals who engage in the distribution of fake ETS.

“He was arrested at his home. He would pocket Sh10,000 on every 100 fake stamps he sold to manufacturers. At times, he would issue a Sh2,000 discount and sell at Sh8,000. This is sabotage of our economy and revenue collec-tion efforts,” said Mr Mwangosi last Wednesday.

The government announced plans to adopt the ETS system in June 2018 and the first phase was conducted on January 15, 2019 whereby stamps were installed on 19 companies that produce alcohol, wine and spirits.

ETS seeks to boost transparency in the collection of excise duty, value-added tax (Vat) and corporate tax from manufacturers.

The ETS system enables the government to use modern technology to obtain production data on a timely basis (real time) from manufacturers.

Source: The Citizen (Tanzania), 16 March 2021

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by Mike Poverello

New report showcases opportunity and growth for tax stamps

New investment in track and trace systems, rising excise taxes and wider commercial applications will drive tax stamp growth in the next five years, according to a new report published by Reconnaissance International.

The third edition of the ‘Tax Stamps & Traceability: A Market Analysis and Technical Update’ identifies cannabis and vaping products as new markets for tax stamps to tap into, at a time when the continued trade in illicit tobacco and alcohol sees revenue agencies using the devices as effective weapons in the fight against counterfeiters and criminals.

The report also points to the fact that by 2023, tobacco products in at least 60 countries will need to have track and trace systems in place to comply with the WHO FCTC Protocol to Eliminate Illicit Trade in Tobacco Products. This could open up additional tax stamp markets and more commercial opportunity for an established product.

More than a 120 billion tax stamps are used annually, the report says, to secure tobacco and liquor excise revenues, or as part of product authentication and secure tax and trace programmes. However, it adds that while the number of countries adopting tax stamps continues to rise, the market for cigarettes and spirits is falling in the face of declining global tobacco consumption and a marginal increase in the sale of spirits.

Coming against the backdrop of WHO’s framework designed to curb the illicit trade in tobacco products, the report is the only one of its kind to cover the global alcohol and tobacco tax stamp market, and considers both the current and future tax stamp and traceability environment in specific countries and regions.

Cannabis and fuel marking among other products are identified as emerging markets for tax stamps and tax marks, where they can be used effectively to protect against the threat of counterfeiting and secure taxes lost to criminals and other nefarious activity.

The question of why paper-based tax stamps, as opposed to digital alternatives, continue to provide the best protection against acts of non-compliance and illicit trade is considered as part of a section looking at the current landscape, the evolution of tax stamp programmes and what’s compelling some countries to extend take-up while others will not consider using them.

Further sections examine the practical steps involved in creating tax stamp and traceability programmes and feature a quantitative analysis of current and future volumes based on consumption data obtained from GlobalData. Information on the different types of tax stamps and systems being deployed across the globe with an assessment of their impact and effectiveness, are also included.

‘Tax Stamps & Traceability: A Market Analysis and Technical Update’ looks to the future with insight and opinion on questions around the viability of paper-based tax stamps and the impact of the WHO FCTC Protocol on tobacco track and trace systems which use tax stamps. It also asks what the common characteristics of these systems are that successfully increase tax revenues and reduce illicit trade.

Nicola Sudan of Reconnaissance International is the report’s editor. She said: “This is an important strategic report, offering insight, analysis and to those with a vested interest in tax stamps, the knowledge needed to progress with their own plans in this burgeoning sector.

“Tax stamps offer a cost-effective way to secure excise revenue, while the authentication benefits provided cannot be overstated. It is why they will continue to be highly regarded and used by revenue authorities around the world well into the future.

“So whether your country, state or jurisdiction currently uses a tax stamp scheme, or is considering investing in such a scheme, it would be beneficial to find out what a modern programme can deliver and why now is the right time to introduce them or expand your current scheme. This report will aid in making the right decisions and choices.”

Full details of how to purchase the report – which will be available in electronic and printed form – are available at https://estore.reconnaissance.net/product/tax-stamp-traceability-a-market-analysis-and-technical-update/

Source: Securing Industry, 1 December 2020