title-provenbenefits

PROVEN BENEFITS

Meyercord Revenue and SICPA have a proven track record of modernizing excise tax collection platforms across the globe. Below are excerpts from some of the successful implementation of our high-tech systems in California, Massachusetts, Turkey, and Brazil.

California

California’s Board of Equalization (BOE) adopted SICPATRACE® in 2005, and SICPA won the rebid in 2010. The new system builds upon the successful completion of SICPA’s groundbreaking initial five-year cigarette tax stamp contract, which delivered more than 1 billion secure, encrypted tax stamps. Under the new agreement, SICPA provides an upgraded encrypted cigarette tax stamp with track and trace capabilities, hand-held portable readers for law enforcement, and customized management reports issued from a centralized data management server.

In addition to reporting additional revenue of $133 million per year in cigarette excise and sales taxes since the SICPA system was implemented, California state authorities report that counterfeiting attempts have dropped by about a third due to  SICPATRACE® and better law enforcement.

Massachusetts

On July 1, 2008, the excise rate in Massachusetts was increased to $2.51 per pack of 20 cigarettes and $3.1375 per pack of 25 cigarettes. Although cigarette excise revenue continued to rise due to the July 1, 2008 increase, Massachusetts was experiencing a drop in the number of stamps sold - well above the usual cessation rate.

In addition to the tax increases and their implications on the Massachusetts' cigarette tax revenue stream, Massachusetts was looking for a way to ensure it received the appropriate amount that was due each year from the Master Settlement agreement (MSA) with major cigarette companies. However, without any program in place to provide the State with visibility into the cigarette market, the State had no way of even determining the annual amount due. Thus in order to gain visibility into the actual volume of cigarettes and the types of brands sold in its State, in conjunction with the need for a more efficient system to capture otherwise lost excise tax revenue, Massachusetts decided to put out a competitive bid for a track and trace system.

With its already successful implementation of a track and trace system in California, SICPA's SICPATRACE® solution was the chosen solution. SICPATRACE® provided Massachusetts with a comprehensive program that met specific requirements set forth by the Commonwealth. In May 2010, the SICPATRACE® solution became operational in Massachusetts and it reached full implementation by March 2011. 

Turkey

Turkey was the first country in the world to adopt SICPA’s technology, SICPATRACE®, to implement a single platform to monitor all excisable tobacco, alcohol and beer products totaling close to 7 billion units per year. The product tracking system required the installation of non-intrusive automatic tracking units onto manufacturers’ packing and filling lines for product monitoring and transmission of relevant information to a central data management system. 

Official figures state that over a five year period covering 2006 through 2011, the Department of Revenue General Management of Accounting observed an 83% increase in the amount of tobacco taxes collected resulting from the adoption of the SICPATRACE® system to enforce a tax rate increase. Even greater results are observed with beer and alcoholic beverages for which the increase is 142% over the same period despite recent tax rate reductions on these products. 

Brazil

The Federal program in Brazil has been in operation since December 2007 and currently provides a counterfeit-resistant “intelligent tax stamp”, applied directly on cigarette packs at the manufacturing site at a rate of approximately 4.6 billion cigarettes per year (official sales). In the first three months of operation at the national level, SICPA’s technology helped the Brazilian government collect R$90 million more in tobacco excise tax revenue than originally forecasted. After successfully meeting the requirements set forth by the Brazilian Government for 5 years, the Brazilian Department of Treasury (Receita Federal do Brasil) renewed SICPA’s contract for an additional three (3) years of operation.