A proposed excise tax stamp system draws controversy amongst industry leaders in the alcohol, tobacco, beer brewery, and water bottling sectors. While they are wary of added costs, information leaks, and disruptions to production, officials at the Ministry of Finance see it as a weapon against counterfeiting and a path to higher tax revenue. Last week, they gathered at the Ministry's headquarters on King George VI St for public discussion.

At the heart of the discourse lie concerns over escalated levies, hidden costs, and the imperative of transparency. Wasihun Abate, a tax policy advisor at the Ministry, stressed the need to implement tracking and tracing mechanisms for the four industries that have been proliferated with high-risk products.

"We must have unequivocal evidence of excise tax compliance," he said.

Wasihun foresees a security infrastructure as reliable as marks on bank notes to eliminate any possibility of counterfeit stamp manufacturing and streamlined excise tax collection.

"Excise stamps have proven their mettle," he said.

Tax stamps, tracing their lineage over 350 years across 80 nations, stand as a testament to the enduring struggle against illicit trade. From oversised parchments in Spain to their modern incarnation as adhesive labels reminiscent of postage stamps, their efficacy has varied. While nations like Kenya and Morocco wield them as potent weapons against illicit commerce, others, like Denmark, have bid them adieu in recent times.

However, the three-year-old excise tax decree, targeting luxury items and those detrimental to public health, has faltered in its quest for fiscal buoyancy. Last year, it fell short by two billion Birr to 27.7 billion Br, a reminder of its limitations in boosting the coffers.

According to Tewedaj Mohammed, head of legal affairs at the Ministry, reducing illicit manufacturing, smuggling and counterfeits goes in line with modernising the tax management system.

"Tax revenue is below the plan," he said.

During the fervent debate, the dissenting voices of industry stalwarts echoed, with practical challenges and apprehensions in their respective sectors.

Yetnayet Beyene, legal director of Dashen Brewery, voiced concerns over the looming spectre of increased costs. Dashen has an installed capacity of around three million hectoliters between its two plants in Gonder and Debre Birhan, in Amhara Regional State. Her apprehensions continue with the uncertainty of reporting requirements in the event of production halts, fearing the unintended revelation of sensitive business information to competitors.

"Competition is fierce in our industry," she said.

Her sentiments find resonance across the sector, with Mekes Sahilemariam, representing Heineken Brewer Factory, echoing concerns over the potential monopolistic control by a single stamp supplier.

"Multiple players must be involved," she said, underlining the imperative of seamless integration into the pace of production.

There was a contrasting view from the tobacco industry, besieged by rampant contraband. They greeted the proposed stamps with guarded optimism. Yayehyirad Abate, head of Corporate Affairs at National Tobacco Enterprise, anticipates a welcome reduction in illicit trade, albeit with reservations about the swift implementation timeline. He queries if the cost implications of digital stamps were considered while advocating for a year preparation period.

Meanwhile, the bottled water sector, long at odds with the excise tax, finds itself thrust into further turmoil. Bottled water manufacturers who have objected to the excise tax ever since it was initially levied on them were predictably upset over what they perceive as a rushed impetus to bring about stamps.