How Standards Help You

As previously announced in Tax Stamp & Traceability News™, it has been five years since the international standard for tax stamps (ISO 22382:2018) was published by the International Organization for Standards (ISO), so in accordance with ISO procedures, this standard is now due to be reviewed.

At the Tax Stamp & Traceability Forum™, from 2-4 October, in Tbilisi, Georgia, there will be a workshop for anyone involved in tax stamps – issuers, suppliers and others – to air their views on how the standard can be improved through this review.

So it will be useful, ahead of that workshop, to examine what international standards are and why they are beneficial, giving context for this tax stamp standard.

There are several international organisations that write and publish standards. The ISO is the most eclectic, publishing standards across a very wide range of activity. It now has 345 technical committees (TCs), where each TC deals with a specific product, product family or management area. TC 1, set up in 1947, soon after the organisation was established, covers screw threads, while the newest, TC 345, works on standards for specialty metals and minerals.

Screw threads might seem like a mundane subject, but it demonstrates a fundamental purpose of international standards: to establish parameters or characteristics for a specific set of items so that there is international compatibility. Thus, a screw manufactured in one country, then shipped to another country where it is used to assemble a product, which in turn is shipped to another country, can, if necessary, be replaced in that third country by another screw from another manufacturer, using a screwdriver that fits both screws.

This is a simple example which nonetheless shows that a standard facilitates interoperability, and thus international trade. Exactly the same principle applies to more complex items or systems, such as biotechnology (TC 276) or vacuum technology (TC 112).

There are other, more specialist, organisations working on international standards, including the Institute of Electrical and Electronic Engineers (IEEE), the International Telecommunications Union (ITU), and GS1, which manages barcode and other standards for product identification. Several standards have been jointly developed between ISO and one of these organisations.

Compliance and guidance standards

Many of these standards are referred to as compliance standards; they are prescriptive, giving instructions to be followed to ensure interoperability, efficient practices and fair trade. They use words such as ‘must’ and ‘do’.

ISO TCs have also written numerous compliance standards which address issues such as management systems, sustainability and other ‘intangible’ systems and procedures. When first published, many of these were aspirational, including ISO 9000, quality management systems (and now a family of several standards), which was first published in 1987 (latest revision in 2018) and has become a ‘must-do’ for many companies and other organisations.

To show that an organisation complies with a standard, it has to be inspected by an approved body, which will issue it with a certificate of compliance with such-and-such a standard. Depending on the size and complexity of the organisation, this will cost a four- or five-figure sum (dollars/euros), and it might require a separate fee-paid inspection at several sites. And then there will be a three-yearly review visit, requiring another fee, to ensure that the organisation is still complying.

In the standards world, it is recognised that it is not always appropriate for an organisation to undertake this expensive process, so there are also guidance standards. These collate the thinking of experts in the field to guide the relevant organisations in best practice in the area of the standard. They use words like ‘should’ and ‘recommend’.

In fact, all standards – compliance and guidance – are the result of consensus by a group of experts. For a national standards body they will be drawn from that country; for an international standard, the experts will be drawn from around the world. This expert group works out the requirements – prescriptive or guiding – for the standards on a consensus basis. This way there should be no bias in the standard towards, say, a proprietary product or a particular country’s way of doing things.

So, a guidance standard is the distillation of many experts’ views on best practice in the field of the standard. The advantage to organisations working in that field is, firstly, to set out for them the best way of achieving the stated aim; secondly, it saves them time and money by providing a short cut to learning how to best achieve the given aim.

Guidance standards also share the underlying aim of all standards of ensuring a level playing field, and encouraging efficient and ethical practices.

And so to tax stamps

There are many standards that can be applicable in the tax stamp field, including those covering management practices, sustainability and health and safety, but the two that are directly relevant are ISO 14298 and ISO 22382.

14298 is a compliance standard titled ‘Management of security printing processes’, first published in 2013 and updated in 2021. It prescribes the procedures and processes for a security printer in managing their business, ensuring the security of those processes. It does not cover the item that the printer is producing but is aimed at the peripheral processes (audit, waste control, supply chain, staff etc.) that contribute to the security of that item. In other words, a tax stamp issuer would do well to get their stamps from a printer that has 14298 certification, of which there are at least 150 around the world certified to one of three levels: fundamental, government or central bank.

Not surprisingly, ISO 22382, titled ‘Guidelines for the content, security, issuance, and examination of excise tax stamps’, recommends that revenue authorities or other tax stamp issuers source their stamps from printers that are certified to 14298 or a similar standard, such as the ANSI-NASPO security management standard.

While 14298 is a compliance standard for security printers, 22382 is a guidance standard for stamp issuers. Accordingly, it sets out what a group of experts – in this case, ISO TC 292 Working Group 4 – considers best practice in the topics around tax stamps, as shown in the title of the standard. WG4 covers authenticity, integrity and trust for products and documents, and I should declare that I am a member of WG4.

While it costs a security printer a five-figure sum to become 14298-certified, the only direct cost of 22382 to a stamp issuer is buying the standard; ISO’s price is 145 Swiss francs, but you can also buy it from your country’s national standards body.

Having bought it, then ask your key people to read it, digest it and get together to plan how to implement its recommendations. Doing so will save you time and money, whether you are introducing a tax stamp for the first time or upgrading an existing one. It will also help to ensure that you get the most suitable stamp for your requirements. Which, in turn, should see an improvement in your tax collection efficacy, leading to an increase in your tax income.