Tax stamps
Various tax stamps (Image: www.tax-stamps.org)

Public finances under strain from the impact of the Covid-19 pandemic can be boosted considerably by investing in tax stamp and traceability programs, according to an international trade body.

Two new webinars organized by the International Tax Stamp Association (ITSA) examine the central role tax stamps play in securing revenues as international supply chains continued to be threatened by counterfeiters and smugglers taking advantage of the pandemic to trade in illicit tobacco.

The trade-in fake tobacco is worth between $40 billion (approximately Rs 2,95,974 crore) and $50 billion (approximately Rs 3,69,967 crore) annually worldwide, according to a 2020 World Bank report and churns out more than 600 billion fake cigarettes.

Properly implemented tax stamp and traceability programs can help governments protect and recoup much-needed revenues as they battle to get their public finances back on track, says ITSA.

The first seminar, open to NGOs, academic institutions and tax stamp producers and authorities, considered best practices for implementing a tobacco control and tax collection program, set against the backdrop of the World Health Organisation’s (WHO) Framework Convention on Tobacco Control (FCTC) protocol to eliminate illicit trade in tobacco products.

A key focus was on African countries who are party to the WHO FCTC Protocol to eliminate illicit trade in tobacco products but do not yet have a tax stamp or traceability system in place – they have until 2023 to implement secure track and trace on tobacco products.

The second event (December 3) will examine how greater traceability is key to a lawful tobacco market and increased levels of tax collection as the pandemic continues to rage. It will also look at tax evasion calculation techniques and estimates in Mexico and Latin-American countries as identified by Michel Jorratt, former director of the Chilean tax administration and currently adviser to the IADB and World Bank.

The seminars come as ITSA looks to reach out to countries and regions that don’t have tax stamp programs to share its knowledge of excise administration and track and trace systems, as well as global best practices. This sees the association supporting Dr Adriana Blanco, head of FCTC Secretariat, in her call anti-tobacco organizations to provide tailored assistance to parties where implementation of the FCTC is weak.

Juan Carlos Yañez, chair of ITSA, said there is an opportunity for the tax stamp sector to show Dr Blanco, who heads the FCTC secretariat, how it can contribute to efforts to drive forward the implementation of tobacco control initiatives, at a time when some parties are putting it to one side in order to focus on the pandemic.

Tax stamps
Juan Carlos Yañez, chair of ITSA, says it is worth finding out what a tax stamp initiative can deliver and why now is the right time to introduce or expand current schemes.

He said, “The need for tax programs has increased dramatically in the global Coronavirus pandemic, which has seen government revenues plummet, deficits rise, and debt levels swell to eye-watering proportions.

Whether your country, state, or jurisdiction currently uses a tax stamp scheme or is considering introducing such a scheme, it would be worth finding out what a modern initiative can deliver and why now is the right time to introduce or expand your current scheme.”

Tax stamp and traceability programs could help governments protect and recoup much-needed revenues as they battle to get their public finances back on track.

Webinar attendees also have the chance to discuss the importance of effective production monitoring and the need for a global information sharing focal point (GISFP) that facilitates the exchange of important data and best practice between countries.

ITSA was founded in 2015 by several leading industry companies and stakeholders to ensure better understanding of the benefits of tax stamp programs and to promote the highest professional standards within the sector.

More than 150 revenue agencies (national and state governments) globally use tax stamps to collect valuable tax duties and excise payments, involving the worldwide production of some 140 billion stamps annually. As well as providing visible proof of tax payment and revenue collection, tax stamps have also taken on a key role in product authentication, anti-tampering, and track and trace applications.

Details of the ITSA seminars can be found here

Tax stamps can be an integral element of track and trace programs and best practice within the sector, effectively monitoring the location and movement of goods throughout the supply chain from manufacture to point-of-sale. A secure T&T works by assigning a unique individual identity to each item – a pack of cigarettes or a bottle of alcohol – during the manufacturing process.

Once assigned, the identity is stored in a secure database and updated every time there is a significant event, such as a change of ownership or payment of tax due, and supports authentication throughout the supply chain. This produces a comprehensive product history; it means that if the pack or bottle is found in a place or state that is irregular, its provenance can be fully traced back, and the responsible party is held accountable.

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