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A Directive To Provide For The Management Of Excise Markings

Ministry of Finance

Summary

This directive establishes a system for the management of excise markings on various excisable goods to enhance tax collection, prevent illicit trade, and protect public health and the environment. It outlines requirements for affixing markings, fees, application procedures, exemptions, and the implementation of a management system.

Who's affected

Manufacturers, importers, distributors, wholesalers, and retailers of excisable goods, including alcoholic beverages, tobacco products, perfumes, and bottled water.

Action required

Businesses involved in the excisable goods supply chain must apply for and affix excise markings to their products as per the directive's specifications and timelines.

Key points

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  • Introduction of excise markings for better tax collection and trade control.
  • Mandatory affixation of markings on a defined list of excisable goods.
  • Requirement for Unique Identifiers (UI) on all markings.
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    • Establishment of an Excise Markings Management System.
    • Appointment of a third-party 'Markings Provider' for UI generation and marking supply.
    • Application process for excise markings with specified timelines.
    • Exemptions for certain goods like those for export, transit, or samples.
    • Introduction of a Registered Operator (RO) system for distributors, wholesalers, and retailers.
    • Penalties for non-compliance, including seizure of goods and financial penalties.
    • Repeal of the Ministry of Finance Excise Stamp Management Directive No 1004/2024.
    • Transitional period of 120 days before full enforcement for existing stock.
    • Directive effective upon publication on the Ministry of Finance's official website after registration with the Ministry of Justice.

Requirements

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  • Excise Markings must be affixed on specific excisable alcohol and tobacco goods, compounded spirits, non-alcoholic beer, cigarettes and other tobacco products, wines, RTD products with alcoholic content of at least 2%, non-alcoholic sugar-sweetened beverages, perfumes, and bottled water.
  • Excise Markings must incorporate a Unique Identifier, deter counterfeiting, facilitate tracking, enable production accounting, and allow verification of authenticity.
  • Licensed manufacturers and importers must apply for excise markings at least sixty days before manufacture or importation.
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    • Excise Markings fees must be paid before the markings are issued.
    • Licensed Operators must facilitate the installation of the Excise Markings Management System at their own cost.
    • Registered Operators (Distributors, Wholesalers, Retailers) must obtain and display an RO Certificate.
    • Manufacturers and importers must declare the excise markings used immediately after affixing them.
    • Manufacturers and importers must report any non-operational production lines to the Tax Authority within 24 hours.
    • Manufacturers and importers are responsible for the conservation and security of the installed System.
    • Manufacturers and importers must declare new brands or changes in graphic art of existing brands at least sixty days before production.
    • All parties involved in the supply chain must verify and authenticate markings before admitting goods onto their premises.
    • Distributors and retailers must keep delivery notes and invoices and provide adequate lighting for marking verification.

Rights and permissions

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  • The Minister may specify other goods on which Excise Markings shall be affixed.
  • The Tax Authority may delegate the generation of UI to an independent third party.
  • The Tax Authority may authorize an importer to receive excise markings before submitting evidence of importation under certain conditions.
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    • The Tax Authority may refuse to issue excise markings if a person has not accounted for previously issued markings or failed to comply with excise tax regulations.
    • The Tax Authority may seize excise markings, equipment, vehicles, or goods under specific circumstances.
    • The Company shall refund excise markings fees for returned unused markings, except in cases of stopping manufacturing or discrepancies between declared and verified imports.

Restrictions

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  • Excise Markings shall be affixed on specific categories of excisable goods.
  • The Minister may specify additional goods requiring excise markings.
  • The Tax Authority shall specify the type and manner of affixing Excise Markings.
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    • Excise Markings fees are payable before issuance.
    • Applications for excise markings must be submitted at least sixty days before manufacture or importation.
    • Excise Markings must be affixed at the production facility for locally manufactured goods, or at the customs post/designated place for imported goods.
    • Only Registered Operators (Distributors and Wholesalers) may hold certain alcoholic and tobacco products for resale or distribution.
    • Manufacturers and importers must report non-operational production lines and cannot resume operations without authorization.
    • Manufacturers and importers must report operating failures or tampering of security seals within twenty-four hours.
    • Transitory provision: Businesses cannot transact with excisable goods not affixed with excise markings after 120 days from the Tax Authority's notice of accepting applications for Excise Markings.

Penalties

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  • A person who contravenes the provisions of this Directive commits an offense and shall be liable on conviction to a penalty provided under the Excise Tax Proclamation or the Tax Administration Proclamation.
  • If a manufacturer or importer cannot account for any excise Markings received, the Tax Authority shall compute excise duty and other taxes on the unaccounted Markings based on the highest excise rate.
  • Wastage or damages of excise Markings exceeding one percent of the quantity issued will result in computed excise duty and taxes on the unaccounted for markings.
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    • The Tax Authority shall seize excise Markings, equipment, vehicles, or goods under specific circumstances related to counterfeiting, non-return of markings, unauthorized possession, or non-compliance with marking requirements.

Objectives

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  • To ensure proper collection of excise tax.
  • To prevent illicit trade in excisable goods.
  • To protect public health and the environment.
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    • To modernize excise tax administration.
    • To enforce excise tax laws effectively.
    • To promote transparency and accountability in the excise tax system.
    • To facilitate the track and trace of excisable goods.

Organizations

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  • Ministry of Finance
  • Tax Authority (Ministry of Revenue or Customs Commission)
  • Markings Provider / ID Issuer / Company
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    • Ministry of Justice

Legal references

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  • Excise Tax Proclamation 1186/2020 (as amended)
  • World Health Organization Protocol to prevent illicit trade of tobacco products
  • Public Procurement and Property Administration Proclamation
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    • Customs Proclamation
    • Tax Administration Proclamation
Original sourcehttps://justice.gov.et/en/directives/a-directive-to-provide-for-the-management-of-excise-markings-no-1072-2025/
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