Tax stamps, which are first and foremost a means of collecting excise revenues, are governed by national regulation and legislation. Increasingly, however, just as counterfeits and criminal networks know no borders, the drivers for improved control over excise products – in particular, tobacco – are becoming regional and even international. The WHO’s Framework Convention on Tobacco Control (FCTC) and the EU Tobacco Products Directive are two cases which illustrate this point.
Whether the catalyst is local, national, regional or international, the path to regulation and legislation is a complex one where the interests of tax and treasury departments, customs departments, health advocates, law enforcers and other stakeholders sometime compete.
ITSA is working to ensure that the tax stamp, as a device for fiscal verification and collection, authentication and supply chain security, lies at the core of policies being drawn up by these stakeholders and that, critically, they form part of an overall framework of regulation, enforcement and education.
An ISO Standard For Tax Stamps
The International Organization for Standards (ISO) has now published a new standard for tax stamps, developed with support and contributions from ITSA.
ISO has over 19,500 standards. These touch on almost all aspects of daily and commercial life, helping to harmonise technical specifications of products and services and to establish best practice in management.
For governments, because standards draw on international expertise and experience they are a vital resource when developing public policy. As tax stamps are a government specified and issued document (in nearly all cases), it is appropriate that ISO should provide a standard specifically for tax stamps. This will help and guide governments in their development and specifications for tax stamps.
In early 2015 ISO established an expert group to draft ISO 22382: Requirements for the content, security, issuance and examination of excise tax stamps. This is a guidance standard intended to advise and assist tax authorities to achieve best practice in specifying, procuring, issuing and examining tax stamps, and it is available to buy and download from the ISO online store, at https://www.iso.org/standard/73859.html.
It is also available from every national standards body (NSB) which is a member of ISO (NSBs are free to set their own price for the standard so it might be worthwhile contacting your NSB to find out whether it is offering it at an advantageous price).
Tax stamp procurement and review process – © ISO 22382
The Scope of the International Standard
ITSA contributed to the funding and drafting of the tax stamp standard, and is conducting a programme of publicity and promotion to ensure that it is adopted by many tax authorities. ITSA’s members will also work within the parameters for tax stamps laid out in the standard to assist their customers – tax authorities and stamp issuers – in meeting the best practices laid out in the standard.
This new standard provides ‘cradle-to-grave’ guidance to tax authorities on their procedures relating to tax stamps. It covers:
- The role and different functions of tax stamps, and how a tax authority should consult to establish the functional requirements of its tax stamps;
- Definitions and terminology;
- Establishing a fair and comprehensive procurement process, including the drafting of the request for proposals (RFP);
- The minimum stamp security requirements with explanations of the materials and authentication features that can be used in a tax stamp;
- The function of and relationship between authentication and track and trace systems, with explanations on the use of a unique identifier (UID);
- The differences between tax stamps on a paper or other substrate, which are affixed to the taxable product, and those which are marked directly on to the product or its container;
- Examination procedures for issued stamps to establish whether a tax stamp is genuine or suspect, and the relationship between the authentication features, the equipment or tools required to examine them and the examiner;
- Quality testing and in-use monitoring of tax stamps;
- Disposal of waste or unused stamps.
As well as benefiting tax authorities, tax stamp and component suppliers will find it valuable to refer to the standard in their customer relations and to work within its recommended best practice parameters when developing new stamps and features.
Organisations that are required to apply tax stamps, including manufacturers and importers of taxable goods will also find it helpful to refer to the standard.