ITSA Hits Back Over Tax Stamp Criticism

The International Tax Stamp Association (ITSA) has responded to criticism of paper-based tax stamps in a new report on the use of blockchain technology for collecting excise duties.

The study by Deloitte highlights the potential benefits of using blockchain, together with ‘digital tax stamps’ (or, in other words, tax marks generated and applied directly to the product by digital technology) to make it easier for revenue authorities to recoup excise duties on tobacco and alcohol products.

The study also raises security, cost and administration issues regarding the use of physical, paper-based tax stamps – particularly in relation to the procurement, transportation and pasting of physical stamps onto packaging – and claims that blockchain could increase supply chain efficiencies and traceability of products, as well as cut costs and reduce the risk of fraud.

ITSA expressed its concern that the study contained many ‘disingenuous statements’ about the current use of tax stamps while ignoring established industry best practices and glossing over deficiencies in blockchain technology.