Stamping Regime for Tobacco Products
In an effort to prevent
contraband tobacco products from entering the Canadian market, and to ensure the
integrity of the tobacco tax system which supports the Government's health
objectives, the Canada Revenue Agency (CRA) is implementing a new excise duty
stamping regime for tobacco products.
This new stamping regime is the third element of
the CRA's Tobacco Compliance Strategy, which is designed to address the issues
of contraband and counterfeit tobacco products in Canada, and which targets all
areas of the tobacco production and distribution chain. Namely, the new stamping
• provide a reliable indication of the duty-paid
status of tobacco products;
• make counterfeit products easier to detect and
seize by enforcement agencies;
• strengthen controls over the manufacturing and
the distribution of tobacco stamps; and
• provide an additional enforcement tool for
federal and provincial compliance and enforcement authorities.
The other two elements of the
Tobacco Compliance Strategy are: increased audits of tobacco manufacturers, and
outreach and monitoring of tobacco growers.
The CRA has awarded a
contract to one supplier for the design, production and distribution of new
stamps that incorporate a number of sophisticated security features. The tobacco
stamps will be required to appear on both domestically-produced and imported
duty-paid tobacco products that are distributed and sold in Canada.
The cost of the stamp will be
covered by tobacco importers and manufacturers through the sale of the stamp.
The Government will not increase funding as a result of this initiative.
The new excise duty stamps for tobacco products
contain a number of overt and covert security features that are very difficult
and costly to reproduce and counterfeit, including the following:
• Overt security features to assist in the
unaided visual identification of the stamps by both the public and government
• A unique sequential identifier; and
• A number of covert security features that can
be read by both tobacco manufacturers and other partners in compliance and
The provinces and federal departments and agencies
have been a part of the CRA's consultation process and they have been invited to
participate in the new tobacco stamping regime.
The stamps are currently in
prototype form, and the CRA is moving ahead with the implementation phase, in
consultation with industry, importers, and governmental
stakeholders. The new stamp is expected to be fully implemented in early 2010,
which will allow all parties sufficient time to prepare accordingly.