New Tobacco Track and Trace System Bestows ‘Digital Enforcement Powers’ on Chile Revenue Authority

During the recent Tax Stamp Forum™ in Budapest, Victor Villalón, former Head of the Chilean Internal Revenue Service’s Tax Compliance General Department, described the ‘digital enforcement powers’ bestowed on the service, in the shape of a new cigarette tax stamp and traceability programme implemented in March this year.

The new powers are underpinned by the country’s landmark tax reforms of 2014, described by some Chileans as the largest in 40 years. The reforms included significant changes in income tax and VAT levels, as well as a substantial increase in specific taxes on tobacco products.

In particular, the enforcement powers bestowed on the revenue service – the official name of which is Servicio de Impuestos Internos (SII) – included the power to conduct remote audits on taxpayers’ systems, as well as request taxpayers to install automated monitoring controls on production lines, and mandate the use of track and trace mechanisms, not only in relation to excise tax programmes but other programmes as well, if required.