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A Directive to Provide for the Management of Excise Stamp No. 1004/2024

MoJ1004/2024

Summary

This directive establishes a system for managing excise stamps on excisable goods to improve excise tax collection, combat illicit trade, and protect public health and the environment. It details requirements for excise stamps, Unique Identifiers (UI), fees, application processes, system installation, and enforcement.

Who's affected

Manufacturers, importers, wholesalers, and distributors of excisable goods, including those dealing with spirits, beer, wine, RTD products, tobacco, and bottled water.

Action required

Manufacturers and importers must facilitate the installation of the Excise Stamp Management System at their own cost and comply with all requirements for applying for, affixing, and accounting for excise stamps.

Key points

10
  • Mandatory affixation of excise stamps with Unique Identifiers (UI) on specified excisable goods.
  • Establishment of an Excise Stamp Management System, including UI generation and tracking.
  • Requirement for manufacturers and importers to facilitate system installation at their own cost.
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    • Procedures for application, issuance, affixation, and return of excise stamps.
    • Specific requirements for UI, including compliance with ISO standards and data inclusion.
    • Detailed responsibilities of the appointed Company for system development, stamp printing, and maintenance.
    • Provisions for fees, returns, wastage, damage, and transfer of excise stamps.
    • Restrictions and exemptions related to excise stamps.
    • Penalties for non-compliance, including seizure of goods and imposition of duties.
    • Transitory provision allowing 120 days for compliance after the official notice.

Requirements

25
  • Excise stamps must incorporate Unique Identifiers (UI).
  • Excise stamps must deter counterfeiting, facilitate tracking, enable accounting, and allow verification of authenticity.
  • UI must comply with ISO/IEC 15459-2:201 standard.
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    • UI must be presented and approved by the Tax Authority.
    • Economic operators must record the movements of excisable goods in the system.
    • Manufacturers and importers must provide necessary information to the ID issuer when requesting UIs.
    • Excise stamp fees must be paid.
    • Applications for excise stamps must be submitted at least sixty days before manufacture or importation.
    • Manufacturers and importers must facilitate the installation of the Management System at their own cost.
    • Manufacturers and importers must maintain records of excise stamps.
    • Manufacturers and importers must declare packages and labels of brands.
    • Manufacturers and importers must declare new brands or changes in graphic art at least sixty days in advance.
    • Manufacturers and importers must declare the location for printing the excise stamp UI marker at least sixty days in advance.
    • Manufacturers and importers must apply for installation or removal of the management system 60 days in advance.
    • Manufacturers and importers must ensure production lines are in proper operating condition during system installation.
    • Manufacturers and importers must report non-operational production lines within twenty-four hours.
    • Manufacturers and importers are responsible for the conservation and security of the installed system.
    • Manufacturers and importers must report any operating failure or tamper of security seals within twenty-four hours.
    • Manufacturers and importers must declare packages and labels of brands manufactured or imported.
    • Manufacturers and importers must declare at least sixty days before the start of production of new brands or any change in graphic art.
    • Manufacturers and importers must declare at least sixty days before the start of production of new brands the specific location where the marker for the excise stamp UI will be printed.
    • Manufacturers and importers must submit an application 60 days before establishing or removing the management system for various reasons.
    • All packages of duty-free or export excisable goods must bear distinct markings.
    • Distributors and retailers must keep delivery notes, invoices, or other supplier documents.
    • Distributors and retailers must provide sufficient light for verifying excise stamps.

Rights and permissions

25
  • The Minister may specify additional goods on which Excise Stamps shall be affixed.
  • The Tax Authority may specify the mechanism for affixing Excise Stamps within 90 days.
  • The Tax Authority may delegate UI generation to an independent third party (ID issuer).
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    • The Tax Authority may determine the maximum permitted characters for UI.
    • The Tax Authority may, at its own discretion, delegate UI generation to an independent third party.
    • The ID issuer shall ensure the uniqueness of the identifier and maintain confidentiality.
    • The Tax Authority shall provide more detailed guidance on UIs in a Schedule within 90 days.
    • The Ministry shall issue a Schedule for excise stamp fees.
    • The Tax Authority may authorize an importer to receive excise stamps before submitting evidence of importation under certain conditions.
    • The Tax Authority shall act on applications within 5 working days.
    • The Tax Authority shall maintain records of taxpayers producing or importing goods requiring excise stamps.
    • The Tax Authority may require manufacturers or importers to provide monthly forecasts of stamp usage.
    • The Ministry shall appoint a Company to develop, install, and maintain the system, print stamps, and supply system components.
    • The Company shall maintain confidentiality of business secrets.
    • The Ministry may require the Company to post a bond to ensure confidentiality.
    • The Tax Authority may require the Company to print and deliver stamps directly to manufacturers or importers.
    • The Tax Authority shall ensure manufacturers and importers use stamps properly and take measures against irregularities.
    • The Tax Authority may require digital stamps to be printed on each package.
    • The Tax Authority may require importers and manufacturers to provide periodic reports on exempted goods.
    • The Tax Authority may refuse to issue excise stamps under specific conditions.
    • The Tax Authority shall seize excise stamps, equipment, vehicles, or goods under certain circumstances.
    • The Tax Authority shall dispose of forfeited excise stamps and seized goods as prescribed.
    • The Ministry may extend time limits under force majeure.
    • The Tax Authority shall register and upload the directive on the official website of the Ministry of Finance.
    • The Company shall refund excise stamp fees for returned unused stamps, except in specified cases.

Restrictions

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  • Excise stamps shall be affixed on specific excisable goods when imported or manufactured in Ethiopia.
  • The Minister may specify additional goods requiring excise stamps.
  • The Tax Authority shall specify the mechanism for affixing Excise Stamps within 90 days.
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    • Every excise stamp shall fulfill specific specifications (UI, anti-counterfeiting, tracking, accounting, verification, WHO Protocol marking).
    • UI must be presented and approved by the Tax Authority.
    • Relevant economic operators must record movements of excisable goods throughout the supply chain.
    • Manufacturers and importers must provide necessary information to the ID issuer.
    • ID issuer must ensure uniqueness, maintain confidentiality, and provide marking for aggregated packaging.
    • Aggregated packaging must be marked with a unique identifier.
    • ID issuer must ensure compliance with WHO Protocol recording obligations for tobacco products.
    • ID issuer must provide for economic operator and facility identifier codes.
    • ID issuer must ensure interoperability based on non-proprietary open standards.
    • ID issuer must provide an exit plan.
    • UI must incorporate specific information (place of manufacturing, facility, product description, market, shipment route, importer).
    • Excise stamp fees shall be charged and paid before stamps are issued.
    • Applications for excise stamps must be submitted at least sixty days before manufacture or importation.
    • An importer must provide evidence of importing goods requiring excise stamps with the application.
    • Manufacturers and importers shall not transact with excisable goods not affixed with an excise stamp or marked after 120 days from the official notice.
    • Manufacturers and importers must facilitate the installation of the System at their own cost.
    • Installation, integration, and maintenance of the System shall be done by an appointed Company under Tax Authority supervision.
    • Software for UI management shall be installed at the Tax Authority premises.
    • Manufacturers or importers are responsible for the cost of applicators, adjustments, or adaptations for new or modified systems.
    • Manufacturers or importers must carry out adjustments or provide information for new systems at least seven calendar days before installation.
    • Manufacturers or importers shall not resume operations on non-operational production lines without Tax Authority authorization.
    • Manufacturers and importers shall be responsible for the conservation and security of the installed system.
    • Only authorized technicians from the appointed Company can perform maintenance.
    • Manufacturers and importers must declare packages and labels of brands, including those for export and duty-free shops.
    • Manufacturers and importers must declare new brands or changes in graphic art at least sixty days in advance.
    • Manufacturers and importers must declare the specific location for printing the UI marker at least sixty days in advance.
    • Manufacturers and importers must apply for installation or removal of the management system 60 days in advance for various reasons.
    • Export and duty-free goods must bear distinct markings.
    • Materials wrapping wholesale packages must have specific printed information for exports, domestic use, or duty-free sales.
    • Excisable goods may be exempted from excise stamps under specific conditions (privileged persons, exports, transit, samples, below commercial quantity via post).
    • Persons involved in the supply chain must verify excise stamps before admitting goods.
    • Relevant economic operators may be required to prove regular use of verification applications.
    • Manufacturers or importers cannot fully account for previously issued excise stamps or failed to comply with excise tax obligations, leading to refusal of stamp issuance.
    • Seizure of excise stamps, equipment, vehicles, or goods will occur for various contraventions.
    • Disposal of seized items must follow prescribed procedures.
    • Unused printed excise stamps must be returned to the Tax Authority under specific circumstances.
    • Damaged printed excise stamps must be preserved for verification and destroyed in the presence of a Tax Authority representative.
    • Wastage or damage of excise stamps beyond one percent requires calculation of excise duty and taxes.
    • Transfer of excise stamps requires prior approval from the Tax Authority.
    • Manufacturers and importers shall not resume operations on non-operational production lines without authorization.

Penalties

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  • Conviction for contravening the directive may lead to penalties provided under the Excise Tax Proclamation or the Tax Administration Proclamation.
  • Products found with cancelled UIs shall be subject to sanctions as provided under the Excise Proclamation.
  • The Tax Authority shall compute excise duty and other taxes on unaccounted stamps based on the highest excise rate, allowing for a maximum of one percent wastage or damage.
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    • Seizure of excise stamps, equipment, vehicles, or goods for non-compliance.
    • Disposal of seized items by the Tax Authority.
    • Refusal to issue excise stamps to persons who have not fully accounted for previously issued stamps or failed to comply with excise tax obligations.

Objectives

6
  • Proper collection of excise tax
  • Prevention of illicit trade
  • Protection of public health and environment
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    • Facilitating enforcement of excise tax laws
    • Bringing transparency and accountability
    • Tracking and tracing of production and distribution of excisable goods

Organizations

6
  • Ministry of Finance
  • Tax Authority (Ministry of Revenue or Customs Commission)
  • International Organization for Standardization (ISO)
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    • International Electro-technical Commission (IEC)
    • World Health Organization (WHO)
    • Public Procurement and Property Administration Agency

Legal references

8
  • Articles 29 and 42(2) of the Excise Tax Proclamation (as amended)
  • Excise Tax Proclamation No 1186/2018 (as amended)
  • ISO/IEC 15459-2:201
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    • World Health Organization Protocol to prevent illicit trade of tobacco products
    • Public Procurement and Property Administration Proclamation
    • Customs Proclamation
    • Tax Administration Proclamation
    • Council of Ministers Customs Regulations
Original sourcehttps://justice.gov.et/en/directives/a-directive-to-provide-for-the-management-of-excise-stamp-no-1004-2024/
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