Excise Becomes Electronic
09 February, 2012
Excise Becomes Electronic

Excising system is to become electronic in Georgia soon and supposed to cut down expenses for business.

On February 3, 2012Revenue Service (RS) of Georgia and the Swiss company SICPA Security Solutions SA signed an agreement on adoption of the electronic system of excise stamp management in Georgia.
The novelty is handy to both Revenue Service and business alike as makes things simpler from many points of view. The system enables the Revenue Service to control production and turnover of

any production of any company instantly in on-line regime. Moreover, the system helps to define whether or not the product is original or falsified.
On the other hand, on-line system spares business from burdensome paper-work related time and expenses.
“It was in line with the RS interests to adopt electronic system of excise marking that accordingly makes available electronic registration of excise taxes in order to have modern technologies in this field too, which will enable us to impose an immediate control on identification which company produced what and how much product entered the market,” Jaba Ebanoidze, Head of Revenue Service, said during the signature event.”This is an effective control tool and also consumers can find out whether or not certain product is a counterfeit.”
According to RS, the new excising system enables both paper and immediate marking of excise as well as non-excise goods; creation of unified centralized system of data management; getting information on both locally produced and imported goods in real time; control/monitoring of marked product turnover at consumer market, registration and reduction of producing defects in local enterprises; protection of consumers from falsification.  
RS announced competition for Excise Stamp Management Electronic System Adoption in November of 2011 and seven companies participated in it. The Swiss SICPA Security Solutions SA won the competition as is met the competition terms completely. The system offered by the winner company implements marking through a unique code imprinted either on a stamp or goods. Product circulation of the production line is supervised by special equipments produced by the Swiss company and they implement identification and marking of goods, as well as quality control of stamps and activation of the stamp’s unique code in the data base.   If any defect is revealed during the quality control the defected product automatically is removed from the production line that eases registration of production flaws to entrepreneurs and insures uninterrupted production process. 
According to Ebanoidze, installation of the special electronic marking machines will be free of charge for business, and the price of excise stamp depends on the product type.
For example, costs for marking of tobacco and bear/alcohol drinks differ. Besides, the cost depends on production capacity of an enterprise. The high production capacity enterprises will adopt electronic marking that spares an entrepreneur form extra costs.  Comparatively low productive capacity enterprises will continue marking by paper stamps. Importers who used paper excises up to day can go ahead with it too.
According to Ebanoidze, the marking cost will be fixed EUR 5 per 1000 product units that is by 2-3 folds cheaper compared to the region and the EU countries.
Levan Kalandadze, an economic analyst, like the electronic excising idea as a whole for he expects it should ease life to business. He just fears that some technical mistakes can create difficulties on the first phase but the system will get smoother gradually, he believes.
“Transportation and logistics of paper stamps was quite burdensome to companies, the electronic format will cut down costs by all means,” Kalandadze said.   
Up today Georgian revenues service excised only alcohol and tobacco product however it plans to excise lemonade and mineral waters too in future. Government works on a legislative initiative to this end. The decision was made for increased risks in lemonade and mineral water production recently.

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