Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
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Case Number: 111497
March 12, 2009
Subject:
_Excise Interpretation
New Tobacco Stamping Regime
Dear XXXXX:
I apologize for the delay in responding to XXXXX letter received from XXXXX - concerning the proposed enhanced tobacco stamping regime. It is hoped that this letter will also XXXXX and the Canada Revenue Agency (CRA) since the date of that letter.
XXXXX, the CRA has maintained an open communication policy to facilitate the implementation of the enhanced tobacco stamping regime (regime) in early 2010. For example, following the official announcement on January 3, 2008 of the awarding of the contract to develop, produce and distribute the new tobacco stamp (stamp), XXXXX.
During the information session, CRA presented, and subsequently confirmed in writing that our proposed regulations will in effect carry the same main points as they do now as it relates to stamp placement:
Current regulations proposed to remain
• All packages of tobacco products (domestic or imported) must be stamped in a conspicuous location
• in a manner that seals the package
• The stamp must be applied directly on the smallest tobacco package available to the consumer
• The stamp must not interfere with any other federal or provincial government packaging or labeling requirements. This is inferred today, but will be specified in the new regulations
Proposed new items to be added
• Placement must not negatively affect the security features of the stamp.
• Stamp will be placed under the cellophane over-wrap.
XXXXX
CRA's proposed regulations will provide tobacco manufacturers with the flexibility to determine their preferred placement of the stamp according to specifications of their various packaging formats and production lines while complying with government packaging and labelling requirements.
Since the information session CRA has had on-going discussions with individual members of the tobacco industry (importers and producers). Based on feedback from Industry XXXXX and major manufacturers of stamp application equipment, the dimensions of the stamp were changed from the initial 20x35 mm to 20x40 mm in order to meet specifications of multiple stamp applicators. Furthermore, for security and financial purposes, it was determined that the stamp will be available in one size only.
XXXXX July 2008 XXXXX, the revised implementation date of early 2010 was established and announced by the Minister of National Revenue on September 4, 2008.
In September 2008, CRA met with Industry and the stamp provider to test the readability of the stamp. The stamp was applied to industry identified "problematic" packs and tested to insure that the security features were not compromised. As you are aware, no significant readability issues were identified. This meeting also gave industry a new opportunity to identify issues, explore options and meet the proposed implementation date.
Furthermore, as outlined in the November 6, 2008 memorandum to industry, a proposal concerning the pre-paying of excise duty at the time of sale of the stamp continues to be reviewed. This initiative should be treated distinctly from the implementation of the enhanced tobacco stamping regime. Should the initiative be pursued, the CRA will provide further information in a timely manner.
I hope that this information is helpful and should you require additional information, please do not hesitate to contact us.
Preston Gallant
Manager
Strategic Policy and Program Improvement
Excise Duties & Taxes Division
Canada Revenue Agency
UNCLASSIFIED
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