Competition watchdog asks for review of fiscal stamp concession

The Competition Authority says the fiscal stamps issued on cigarettes and alcoholic beverages increased by four times, considerably raising costs for the business community which has repeatedly opposed this concession.
TIRANA, Nov. 19 – The Albanian Competition Authority has recommended the review of a deal with Switzerland’s SICPA which back in 2012 was awarded a 10-year concession to produce and establish a tax stamps control system on tobacco, alcohol and pharmaceutical products because of having high costs, casting doubt whether it has increased tax revenue and fought tax evasion and smuggling of excise products.
In an analysis of the concession, the competition watchdog says the fiscal stamps issued on cigarettes and alcoholic beverages increased by four times, considerably raising costs for the business community which has repeatedly opposed this concession.
Fiscal stamps on cigarettes were raised to 2.7 lek (Euro 0.02), up from 0.5 lek while fiscal stamps on alcoholic beverages rose to 2.9 lek, up from 1.2 lek previously. A 3 lek fiscal stamp was also introduced on beer and 2.9 lek on medicines.
The Competition Authority argues that the law on the protection of competition and commitments under Albania’s Stabilization and Association Agreement with the EU have not been respected in this exclusive monopoly concession.
The regulator has also requested the review of the concession contract as far as fiscal stamps on medicines are concerned as having high costs for pharmaceutical products which are highly sensitive. No fiscal stamps have been produced on medicines since the award of concession.
The watchdog has demanded the Finance and Economy ministries to carry out an economic and technical evaluation of the concession and whether it has fulfilled its goal of fighting tax evasion and the smuggling of excise products.
Back in 2012, Switzerland-based Sicpa was awarded a 10-year concession to produce and establish a tax stamps control system on tobacco, alcohol and pharmaceutical products for 10 million euros. The leading global provider of security inks and solutions will benefit 2 percent of income from the sale of tax stamps under the concession.
The novelty of this concession is the implementation of Sicpatrace (Secure Track & Trace Solutions), providing control mechanisms against illicit trade.
According to a Finance Ministry statement, 1000 stamps for tobacco products will cost 20 euros, compared to 32 euros for alcoholic beverages, 22 euros for beer and 14.43 for medicines.
The business community, especially beer producers strongly opposed the concession saying it increased costs for local breweries by at least 15 percent and endangered the domestic beer industry which has invested 80 million euros, mainly from loans taken by commercial banks.
Producers complained that Albania’s current excise tax level at 22 euros/ hectolitre, is far higher than in Germany, the Czech Republic, Bulgaria and Greece where excise rates vary from 5 to 14 euros/hectolitre.