The Oman Tax Authority has announced new timelines for the phased implementation of its Digital Tax Stamps project – an initiative designed to help regulate the import, trade and sale of excisable products, as well as to optimise the collection of excise tax on these goods.

The Digital Tax Stamp project, first unveiled earlier this year, is being implemented in phases per specific timelines, starting with cigarette and tobacco products. With effect from June 30, 2022, importers and local manufacturers of excisable products have been obliged to start requiring original manufacturers to affix Digital Tax Stamps – also known as excise tax stamps or simply ‘digital tagging’ -- on tobacco packaging.

The next key milestone in the programme’s implementation falls on October 14, 2022. Effective from this date, cigarettes and tobacco products without Digital Tax Stamps will be prohibited from entry into the country. Going into 2023, all tobacco products will be barred from import, distribution or sale within the country if they lack the digital tax stamps effective from February 1.

The digital tagging project stems an agreement signed by the Oman Tax Authority in February this year, with British-based De La Rue, a leading global provider of banknote printing and authentication solutions for excisable goods. As part of the agreement, De La Rue has committed to supporting the rollout of a sophisticated platform, complete with foolproof digital stamps, and tracking and authentication tools to sift illicit goods from genuine products. By enabling the comprehensive tracking and verification of excisable goods imported and sold in the country, the Tax Authority said it aims to optimise revenue collection from excisable goods.

Digital tax stamps help fight the illegal import of counterfeit cigarettes, tobacco products and other excisable goods - the clandestine distribution and sale not only has potential health consequences for consumers, but also deprives the government of excise tax revenues.

The Sultanate of Oman currently imposes an excise tax ranging from 50 to 100 per cent on cigarettes and tobacco products, alcohols and spirits, carbonated and energy drinks, and pork products – a levy that first came into force around mid-June 2019. The list was enlarged in October 2020 to include a wide range of sugar-sweetened drinks, canned juices and other ready-to-drink beverages.

De La Rue’s Digital Tax Stamp will be implemented over a five-year timeframe, starting with its application to cigarettes and tobacco products. The solution will involve the use of secure printed tax stamps and digital tracking tools in accordance with guidelines prescribed the World Health Organisation’s (WHO) Framework Convention for Tobacco Control (FCTC).

“Tax stamps provide governments with a way to mark their excisable products, ensuring the correct tax has been paid and to enable the validation and authentication of these products as genuine. The design of the tax stamp is achieved via a sophisticated layering of highly secure print features combining specific overt, covert and forensic elements, bespoke to each country’s requirements,” De La Rue earlier explained.

As for the digital tagging of other excisable goods, the Oman Tax Authority has said it will expand coverage to include the full range of products in a phased fashion.

Excise tax earnings amounted to around RO 48 million for the first six months of 2022, helping bolster non-oil revenues for the Omani government.

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