Kenya Revenue Authority (KRA) has rolled out a new generation of serialised tax stamps for excisable goods as part of its strategy to continuously review and improve the security features of the stamps.

Malta has become the first European country to allow limited cultivation and possession of cannabis for personal use, setting a precedent that is expected to be followed by others.

The procurement of cigarette tax stamps for the US island territory of Guam has gone back to square one, as only one bid was received for supplying the stamps, and that bid was rejected for not meeting all the requirements, advised Marie Lizama, Deputy Director at the Department of Revenue and Taxation (DRT).

In the United States, state and local governments have been facing the challenges of regulating cannabis and hemp for medicinal and adult use. These challenges are now going international as more countries consider regulatory programs.

A review of this year's headlines.

No review of 2021 would be complete without mention of the COVID-19 pandemic and the dramatic effect it has had on almost everything – including illicit trade.

Many technologies and features with their roots in commercial printing have made, and continue to make, a substantial contribution to secure document production. However, these technologies have for the most part been concerned with producing visual colours, perceived by the unaided eye as conventional colour printing.

Tax Stamp & Traceability News™ recently spoke to three members of LEONHARD KURZ about the company’s comprehensive tax stamp solution and, in particular, its adoption of visible digital seal (VDS) technology for tax stamps and other secure documents.

In 2011, Chile began seriously considering implementing a tax stamp and traceability programme, when Michel Jorratt, a member of the Chilean tax authority, Servicio de Impuestos Internos (SII), published a study estimating that over $500 million were being evaded yearly in cigarette tax in Chile.

Metrc, the leading provider of cannabis regulatory systems in the United States, has announced a new contract with the US territory of Guam. This will be Metrc’s first client in the eastern hemisphere and its 17th government contract for a track and trace system.

Following the roll-out of secure track and trace on domestically manufactured tobacco products, Pakistan’s Federal Board of Revenue (FBR) has now extended the system to the next sector ‘on its list’: sugar.

OpSec Security has announced its investment in Europe’s first HP Indigo 6K Secure Digital Press, which offers both security and flexibility with its single-pass productivity and secure variable data options.

OpSec Security, together with technology partner Scopsis SAL, has announced a new partnership with Régie Libanaise des Tabacs et Tombacs (Régie Libanaise) to combat the illicit tobacco trade in Lebanon.

The legalization of cannabis provides tremendous opportunities, not only for legitimate cannabis growers, distributors, and dispensaries, but also for criminals and criminal networks looking to establish or expand illegal operations.

The Second Meeting of the Parties (MOP2) to the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products concluded a few weeks ago, with some decisions adopted in record time.

During a recent online technology event, De La Rue’s Authentication division presented interesting developments in the field of digital security printing and product traceability.

The International Tax Stamp Association (ITSA) is calling for improvements to a directive that controls the manufacture, presentation and sale of tobacco products in the European Union.

The purpose of this article is to outline the reasons we should look at the technologies being deployed for recycling as a potential opportunity. We will look at three technologies in various states of development and set them in context of our industry.

We are delighted that the Tax Stamp & Traceability Forum™ will be returning next year and that the tax stamp community will be able to gather together once again, in person, after what seems like a very long time.

In the July 2021 issue of Tax Stamp & Traceability News™, an article discussed the legal issues surrounding cannabis (or marijuana to those of us who are a little older) in the United States, where many states have already put in place legislation to track and trace the illegal distribution of cannabis and protect tax revenues.

A new nationwide study among 2,000 US adults, commissioned by SICPA North America and conducted online by the Harris Poll, shows broad support for securely labelling cannabis products to verify their legitimacy and safety in the marketplace.

The South African Revenue Service (SARS) has claimed a staggering ZAR 19 billion ($1.28 billion) in unpaid taxes from just one company, Verbena Freight and Logistics Management, which has since been accused of tobacco smuggling. Most of the outstanding amount relates to customs duties.

A number of new tax stamp launches have been reported recently in the media. On 1 January 2022, Bulgaria will introduce new stamps on tobacco products, with stamps for bottled alcohol beverages following three months later.

The World Conference on Tobacco or Health recently hosted a virtual summit, in partnership with – among others – the World Health Organisation, WHO FCTC Secretariat and Framework Convention Alliance.

The visible digital seal technology, originally adopted by countries for travel document verification, is now gaining wider international acceptance as an affordable and efficient solution outside of the travel domain – including on tax stamps.

The United Nations Interregional Crime and Justice Research Institute (UNICRI) has released its ‘Technology and Security: Countering Criminal Infiltrations in the Legitimate Supply Chain’ report.

The Tanzanian Parliamentary Budget Committee has commended the performance of the country’s tax stamp programme and has called for it to be extended to more products.

De La Rue recently announced a major investment to expand its existing facilities in Malta, in order to create a 29,000m2 manufacturing site. The expansion will double De La Rue Authentication’s manufacturing capacity for tax stamps and brand protection labels.

Lately, we’ve been hearing of a growing number of companies that are offering, or expanding on, their market surveillance and product intelligence services as a way of helping enforcement officials and brand owners to quickly identify illicit trade activity in particular markets, and to act upon these activities before it is too late.

Nasdaq-listed VerifyMe, which uses physical, digital and online technology to create customised authentication, track and trace and customer engagement solutions, recently announced an initial order for 4 million VerifyMe technology-enabled labels from a new cannabis-related client.

The International Tax Stamp Association (ITSA) is being increasingly recognised by government revenue departments as an authoritative body of experts on tax stamp and traceability solutions for excise products.

In July, Russia’s new National Product Traceability System (NPTS) transitioned from being experimental and voluntary, to a mandatory scheme for businesses dealing in certain types of products. The new scheme was implemented alongside the already existing Chestny ZNAK (‘honest mark’) product traceability system, introduced in 2019.

Four countries in the Association of Southeast Asian Nations (ASEAN) – namely Cambodia, Indonesia, Myanmar, and Vietnam – could have collected an additional $4.81 billion in tax revenue over the last two years and prevented more than 1.3 million premature deaths, if they had had an effective tobacco tax policy in place, claims a recent study released by the Southeast Asia Tobacco Control Alliance (SEATCA).

In June, in an unfortunate hooch tragedy (hooch is another word for moonshine – or illicit liquor), more than 100 people lost their lives in the Indian state of Uttar Pradesh. Following the incident, a police raid raised concerns that the state excise policy was inadequate and needed reviewing, especially in relation to the use of tax stamps as an important anti-counterfeiting tool.

In last month’s Tax Stamp & Traceability News™, we published the first of a two-part review of tax stamps and traceability programmes in Latin America. This month, we give a brief update on Central American countries, together with more in-depth coverage of Costa Rica and Ecuador, where there have been several key developments.

Malta is showing the world how to address the complex problem of illicit tobacco – ie. by adopting a steady and consistent approach.

In July, the WHO Framework Convention on Tobacco Control (FCTC) held a webinar on the benefits of track and trace systems as tools in tobacco tax administration, as well as the best practices for implementing such systems.

The Sindh High Court in Pakistan has reversed a stay order imposed earlier this year on a licence agreement issued by the Federal Board of Revenue (FBR) for a track and trace system on local and imported tobacco, cement, sugar and fertiliser.

In this article, we examine the illicit tobacco trade in Australia and how it is continuing to evolve. We look at what continues to drive smokers to seek illicit tobacco, but also what criminal networks did when looking to source and traffic illicit tobacco products into Australia during the pandemic.

Bahrain’s National Bureau for Revenue (NBR) and the General Tax Authority (GTA) of Qatar have recently announced the signature of new contracts with De La Rue for the provision of national digital tax stamp and traceability programmes on a number of excise goods.

It is no secret that the world, and the Latin American region in particular, has faced many negative consequences of the COVID-19 pandemic.

KPMG’s annual study of the illicit trade in tobacco in Europe is a robust and well-established study of illicit trade trends in Europe since its inception in 2006.

The recent news that Nigeria is considering the introduction of excise tax on telecommunication airtime charges, in a bid to raise additional revenues, has prompted stakeholders to question whether excise taxes are actually appropriate for this sector.

OpSec Security has launched OpSec® SmartCheck, a proprietary, smartphoneenabled solution that uses artificial intelligence to validate optically variable devices (OVDs).

SICPA’s latest generation of handheld detection solutions, SICPAGUARD® HDSense – which is used for checking product authenticity in the field – has been recognised with a 2021 Red Dot Design Award.

The first draft of a long-anticipated US senate bill to federally legalise marijuana has been released. While cannabis is legal for medical or adult-use in 36 US states and four territories, at federal level it is still classified as an illegal, Schedule I drug.

The German company ZEISER, which provides impact and non-impact serialisation solutions and services to the security printing industry, has acquired the track and trace software solutions of Inspectron, a global technology provider of document inspection and track and trace systems for security printers.

When South Africa banned the sale of all alcohol and tobacco in early 2020, the intent was clear and noble: free up hospital beds so they would be available for COVID patients – and reduce tobacco consumption while a respiratory disease is ravaging the country.

Gleitsmann Security Inks (GSI) has launched what it terms the ‘world’s first traffic light for banknotes’, in the form of mouveGSI, a unique security feature that will also help safeguard security documents such as tax stamps using luminescent colour effects.

Over the past few months, a number of interesting tenders for tax stamps and track and trace systems have been issued by various revenue authorities across the world. Most of these tenders are characterised by two things: 1) their need for extensive systems that cover physical tax stamps, secure track and trace, and even production line monitoring; 2) their need for systems that cover a wide range of products.

The news of the untimely demise of Mr U K Gupta has left the Authentication Solution Providers’ Association (ASPA) family and the entire authentication industry in shock.

The call for papers for Optical & Digital Document Security™ (ODDS) conference, the new security technology ‘super-event’, is now available from the event website. Organised by Reconnaissance International, this conference – to be held in Vienna, Austria, 17-19 January 2022 – brings together Reconnaissance’s two successful technical conferences to cover the key security and protection topics that have become more pressing in our digital age.

Following the 2019 launch of its tax stamp and traceability programme on locally manufactured and imported beer, spirits, wine, soda, mineral water and tobacco products, the Uganda Revenue Authority (URA) has far exceeded some of the key performance targets set for the programme.

In France and the UK, there have been recent news stories of cigarette packs identified in the market as illicit because they were all carrying the same ID number (when this number should in fact be unique to each pack). What was not mentioned in these reports, however, was whether or not the packs were carrying authentication labels, which they are obliged to do under the EU Tobacco Products Directive (TPD).

In April, Burkina Faso’s Ministry of Industry and Trade welcomed a delegation of public and private sector officials from its West African neighbour Mali, who were seeking to draw inspiration from Burkina Faso’s experience in tobacco product traceability.

According to media website dawn.com, there are gaps in the picture with regard to The World Health Organisation’s award to Pakistan for its anti-tobacco efforts.

The growth of informal economic activity has become a challenge throughout the Latin American region. To address this, the Swiss-Chilean Chamber of Commerce recently held a webinar to discuss the challenges of informality (in employment, government, taxation), as well as the actions that policymakers, in the region and elsewhere, could take to halt an increasing trend resulting from the COVID-19 pandemic.

It’s not often that we hear members of the tobacco industry complaining that a tax authority is not issuing tax stamps – in fact, the complaints are usually because the opposite is true.

In the January issue of Tax Stamp & Traceability News™, we launched a new series on the use of tax stamps and associated track and trace systems in different regions of the world, starting with Africa. This month, we shift the focus to Asia and Australasia.

Europol’s Serious and Organised Crime Threat Assessment 2021 (SOCTA-21) provides a detailed account of the dramatic impact that the COVID-19 pandemic has had on organized crime, illicit markets in general and the illicit tobacco market in the EU in particular.

The illicit fuel trade in Benin has soared since 1980, and the situation isn’t much better today, reports David Zounmenou for ISS Today.

CCL Design has announced a partnership with iTRACE Technologies, a leading provider of supply chain security applications for anti-grey and anti-counterfeit markets. The partnership will integrate the iTRACE 2DMI® smartphone authentication capability with CCL Design’s HP Indigo-based security label production.

The Australian brand protection and consumer engagement solutions provider YPB Group has launched MotifMicro™, its forensic, smartphone-readable, anti-counterfeit technology for high-volume applications, which will provide individualised markers for products and documents.

Following its 4th Annual General Meeting, held in May 2021, the International Tax Stamp Association (ITSA) has appointed four directors to its board.

In April, Reconnaissance International held a one-hour webinar to present its new review 'Tax Stamps & Traceability: A Market Analysis and Technical Update' to over 200 registrants. The co-editor of the review, Nicola Sudan, was joined by its two main contributors: Michael Eads (ME) of Sovereign Border Solutions, and Richard Jotcham (RJ) of Axess Technologies.

Georgia has a remarkably successful tobacco tax stamp programme which has been reported on in Tax Stamp & Traceability News™ (TSTN). Here we interview two managers from the Revenue Service of the Ministry of Finance of Georgia (GRS), Levan Dgebuadze, head of the Service Department, and Samson Uridia, head of the International Relations Department, to find out more about it.

An ongoing issue of concern to the tax stamp world has recently resurfaced. The issue refers to the recent release of tax stamp tender specifications for Oman, which appear to eliminate all but a seemingly preselected supplier, thereby rendering what should be a competitive tender almost non-competitive.

SICPA has announced a new three-year partnership with Rhizo Verified, a US-based third-party hemp verification, authentication, and traceability solutions company.

In a March article published by the Tax Foundation, Ulrik Boesen, Senior Policy Analyst, Excise Taxes, at the foundation’s Center for State Tax Policy examined how US state lawmakers are considering increasing excise taxes on soft drinks to offset decreases in income tax.

Nepal has been using excise stamps (hereinafter referred to as tax stamps) for more than two decades now, with the stamps effectively contributing to government tax revenue. Indeed, every year, the Nepalese government generates 57 billion Nepalese rupees ($477 million) from excise duty, value-added tax, and health hazard tax imposed on cigarettes and alcohol.

Track and trace, trace and track, supply chain transparency, traceability… a confusion of terms to describe the use of an encoded unique identifier to determine the source and the pathway of an individual product.

In March, the consortium of Authentix, Inc, MITAS Corporation and AJCL Private Limited finalised a licence agreement with the Pakistan Federal Board of Revenue (FBR) to implement a track and trace system on tobacco, cement, sugar and fertiliser. The agreement covered an initial five-year term, with a three-year extension option.

Open this article to access the recording of this event.

In the July 2016 issue of Tax Stamp News™, Sven Bergmann of Venture Global Consulting covered a report by the Macdonald-Laurier Institute – a conservative policy think tank in Ottawa, Canada – on the illicit tobacco trade in Canada.

During March and early April, De La Rue ran its inaugural Excise Tax Protection Course. The six-module course, delivered as online seminars, was aimed at government excise managers and professionals and was by invitation only. De La Rue plans for the course to become an annual event.

In 2019, more than 25 people died in a single case of alcohol poisoning resulting from methanol-laced alcoholic drinks. Soon thereafter, the government closed over 10 establishments and seized 55,000 containers of the killer alcohol.

In last month’s issue of Authentication News®, we looked at the tantalising prospect of combining the analytical capability and connectivity of a smartphone with the authenticating power of a hologram, touching on how reliance on end-user knowledge of hologram features could be alleviated by the use of smartphones to verify the holograms.

An ongoing issue of concern to the tax stamp world has recently resurfaced. It refers to the use of the term ‘tax stamp’ to describe security features that have nothing to do with tax collection.

On 1 April, the Uganda Revenue Authority (URA) will launch its ‘Digital Tax Stamps’ (DTS) programme on cement and sugar. Initially introduced at the end of 2019 on domestic and imported beer, spirits, wine, soda, mineral water and tobacco products, the programme resulted in a 270% increase in the number of active taxpayers in the country.

The Organized Crime and Corruption Reporting Project (OCCRP) has released two articles in connection with its investigations into cigarette smuggling activities in West Africa.

The Philippines Bureau of Internal Revenue (BIR) has announced it will reverse the rules exempting export cigarettes from carrying tax stamps, after a legislator raised concerns that exports were entering the market as tax-free smuggled goods.

When Canada legalized cannabis in October 2018, the expectation was that cannabis would be a significant revenue generator right out of the gate.

In its bid to generate excise revenue and disrupt the kind of spurious partnerships between manufacturers and transporters that have led to tragedies involving illicit liquor, the Punjab state government has adopted a slew of excise policy measures.

A recent webinar, entitled ‘How Non-Cloneable Codes Enable Supply Chain Automation and Credible Traceability,’ has raised contentious questions with regard to the use of physical security features and unique identifying codes as authentication tools.

OneAgrix, an agriculture and halal food B2B e-commerce platform, and Switzerland-headquartered INEXTO – a cloud-based global tracking systems and brand protection solutions provider – have strategically partnered to facilitate a digital traceability solution for the fast-growing global halal industry.

The Kenya Revenue Authority (KRA) is continuing to surpass its tax collection targets, despite a challenging economic environment caused by the COVID-19 pandemic, according to local media reports.

First, we hear that the Pakistan Federal Board of Revenue (FBR) is on the point of awarding a track and trace contract for tobacco, sugar, cement, fertiliser and beverages to the highest scoring bidder in its latest tender. Then in the next breath, we learn that complaints have been received against the FBR over anomalies in the bid evaluation process.

The Future Investment Initiative (FII) Institute – which describes itself as ‘a new generation of global not-for-profit foundation that ensures the world's brightest ideas find their way to materialise, scale and create positive sustainable impact on humanity’ – has entered into an agreement to combat counterfeit and illicit trade in Africa.

Trinidad and Tobago’s Trade Minister, Paula Gopee-Scoon, has announced the development of an action plan, in collaboration with key trade-related agencies and the private sector, to address the problem of illicit trade, particularly in regard to tobacco and alcohol imports, reports looptt.com.

A comprehensive new e-library focusing on tobacco taxation and illicit trade has been launched by the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) Knowledge Hub at the University of Cape Town’s (UCT) Research Unit on the Economics of Excisable Products (REEP). A project two-and-a-half-years in the making, it is set to be a valuable resource for students, researchers and policymakers across the globe.

The European Union represents the world’s first attempt at implementation of wide-scale, multi-country tobacco traceability and the largest iteration of the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products (the Protocol) in action. The implications in relation to one of the world’s largest tobacco market’s interpretation and implementation of the Protocol, as well as the benefits that traceability can provide in terms of combatting illicit trade, has the significant potential to influence tobacco traceability the world over.

In last month’s Tax Stamp & Traceability News™, we launched a new series on the use of tax stamps and associated track and trace systems in different regions of the world, starting with Africa. This month, we shift the focus to the Middle East.

Smart packaging is an area that is pertinent to the interests of our community. It has links to track and trace, product labelling and interaction with the brand through technology. The aim of this article is to take a wider look at trends in smart packaging and consider some of the potential implications for tax stamps and track and trace solutions.

Remember when we wrote a while back in Tax Stamp & Traceability News™ about the very plain, unsecured, serialised barcode label that had been introduced in Delhi, India to track and trace spirits, wine and beer products between distillery and final retailer (TSN January 2016)?

​At the beginning of January, the Liberia Revenue Authority (LRA), in collaboration with the Ministry of Finance and Development Planning (MFDP), began a month-long training workshop on the procedures and processes leading to the implementation of excise tax stamps on several products sold on the Liberian market, reports LRA on its Facebook page.

The time has now come for us to be considering the changes that the current pandemic will make to our industry. The purpose of this article is to look at the reshaping of one particular technology with the intention of prompting a similar appraisal of others. It is does not attempt to identify all the solutions but to at least propose a framework for the questions.

The Gaelic word ‘whisky’ can roughly be translated into English as ‘water’ and so it comes as no surprise that sales of the golden liquid are worth roughly £5 billion annually to Scotland’s economy. As with many premium products, whisky is a favourite target for counterfeiters, which not only takes income away from the legitimate brand owner but deprives revenue authorities of much needed taxes.

Cannabis Global, Inc, a provider of what it calls disruptive cannabis and hemp-related technologies, has announced an enhancement to its Comply Bag™ Cannabis Transport System, in the shape of a fully integrated application that will allow shippers and receivers to track, monitor and confirm important aspects of cannabis shipments.

A new study focusing on the trends and challenges of counterfeit and illicit trade in the high-tech sector – as well as the technologies for combatting such trade – provides interesting insights that are of relevance to other industries, including excise products.

The UK tax authority, HM Revenue and Customs (HMRC), has unveiled proposals for tougher sanctions against small-scale sellers of illicit tobacco, while at the same time putting in place its post-Brexit tobacco supply chain control measures.

We kick off 2021 with a new series on the use of tax stamps and their associated track and trace systems in different regions of the world – starting with Africa. The series provides a summary of the quantitative and qualitative analysis of tax stamp usage, together with country profiles, which formed a significant part of Reconnaissance’s recently released report ‘Tax Stamps & Traceability: A Market Analysis and Technical Update’.