South African Revenue Service seeks partner for smart excise stamp system — TimesLIVE

The South African Revenue Service (Sars) is seeking a partner to develop a system of secure stamps and smart counters for excisable goods. It is intended to help monitor tax payments and identify legal and illegal products, TimesLIVE reports.

Sars Commissioner Ngobani Johnston Makhubu said the agency aims to create a stamp that would be difficult to counterfeit or alter. The tax service discussed the possible use of security technologies with the South African Bank Note Company. Sars estimates that the country’s illegal goods market amounts to 280 billion rand.

Production control

The stamps are planned to be provided to manufacturers in a controlled environment, applied on the production line and scanned during the manufacturing of goods. Data from the system are to be sent to the tax administration. If the system does not transmit information during a period when a company declared production, Sars will be able to send a response team for an inspection.

Makhubu also stressed the need for physical oversight of enterprises producing excisable goods. According to him, the service identified business entities whose banking transactions did not correspond to their financial statements.

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Search for secure counters

In 2021, Sars installed counters at factories to count cigarettes, but violators learned how to interfere with their operation. The service is now examining solutions available worldwide for smart counters that are expected to be more resistant to such interference.

The new system is intended to cover not only tobacco and alcohol products. Sars is also considering using it for pharmaceutical products and sugary drinks subject to the relevant levies. Finance Minister Enoch Godongwana said that modernizing customs and excise controls, including cargo scanning and goods tracking, is part of efforts to combat illegal trade in alcohol and tobacco.

Meanwhile, British American Tobacco cited an Ipsos study according to which cigarettes priced below the minimum tax due are still sold in three out of four stores in South Africa. The company said packs costing less than 20 rand were available in nearly two-thirds of stores.