Tax stamps have evolved from simple adhesive labels into sophisticated tools that play a crucial role in revenue protection and tax compliance and they are of increasing importance for a number of reasons; such as helping to reduce fraud and ensure that all taxable products enter the market legally, thereby protecting public revenue, writes Peter Thomas, pictured, Managing Director at Smurfit Westrock Security Concepts.
Tax stamps have been around since the late 17th century and were originally embossed or impressed on products or documents. Governments use tax stamps to verify that excise taxes on goods—such as alcohol, tobacco, fuel, and, increasingly, even cannabis or luxury products—have been properly paid. Following a competitive tender, we have recently been awarded a contract by the Office of the Revenue Commissioners, the Irish Government agency responsible for customs, excise, taxation and related matters, for the supply of tobacco tax stamps. Under the terms of the deal, we will be responsible for the printing and supply of the tax stamps to be applied to specified tobacco products for the Irish market to help ensure that the products are legitimate, and duty paid.
Each stamp protects a significant amount of revenue to the Irish Government and therefore to combat fraud and ensure revenue is protected, SKSC has designed the stamps to contain numerous security features, some of which are SKSC exclusive developments. This is in part in response to the fact that across the globe we are seeing tax evasion and fraud techniques grow more sophisticated.
For example, according to the World Health Organisation (WHO), the illegal tobacco trade represents $40.5bn in lost tax revenues globally and accounts for 40 per cent to 50pc of the total tobacco market in certain countries. Africa is a region where this type of tax evasion and fraud is prevalent and at SWSC we have launched a new service for the North African market to support the ongoing development of secure printing in the region for items such as excise stamps. Working in collaboration with local businesses we provide a range of services including consultancy and pre-press design and artwork (both physical and digital) in a move that will enable indigenous print businesses that may lack the experience and expertise in the security element, to maximise the opportunities. We can provide design, production and logistics for documents requiring specialist security features using its expertise in both traditional and digital print.
This is also a major public health concern for certain products like alcohol and tobacco as tax stamps also help assure consumers that products meet certain regulatory standards and are safe. They can also be used to convey important information about product origin, quality, or even health warnings, thereby supporting broader public health initiatives.
So, the stakes are high, and the industry has had to respond with better solutions to combat these issues. This includes designing them with security features like holograms, QR codes, or other digital markers that are hard to replicate. There is also the option of replacing traditional paper-based or adhesive stamps with digital tax stamps. These digital systems often integrate with broader track-and-trace technologies, allowing for real-time monitoring of product movement along the supply chain. Innovations such as blockchain, RFID, and advanced encryption not only make counterfeiting more difficult but also provide valuable data for regulatory authorities to identify patterns of evasion or illegal trade.
As technology continues to advance and regulatory demands become more complex, the role of tax stamps is likely to expand further and with global trade on the rise, there may be more efforts to standardise systems internationally, facilitating easier cross-border transactions and cooperation. By leveraging new ideas and technology it will enhance fiscal control, ensure product authenticity, and protect both government revenues and public interests in an increasingly interconnected world.
At SWSC we are committed to supporting this. Our solutions are designed to make the world a safer place, helping to protect against criminal elements. We keep up to date with the latest fraud and counterfeit trends, designing products to combat future attacks and address the ever-improving technological techniques used by ‘bad actors’.
