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Computerization in excise duty tax

A draft amendment to the Excise Duty Act prepared last year by the Ministry of Finance raised hopes of improving the existing tax system in the field of excise duty (number from the list: U35 and U36). However, the postponement of the implementation of the new rules raises many questions. The changes were originally intended to take apply from the beginning of 2019, the date was abandoned and a new one was announced for 2020. But will this term not change too? We will find out in a few months.

The changes are intended to hypothetically improve the functioning of the Excise Movement and Control System (EMCS PL2). The amendment provides for regulations aimed at simplifying the existing controls and supplies of excise goods. Moreover, the new rules also provide for a more transparent form of registration of excise duty payers.

The changes look promising – but is there really a technological revolution in public administration?

What is EMCS PL2?

To start examining the purposed rules to modernize excise duty, it is first of all necessary to mention what EMC PL really is.

EMCS PL2 (Excise Movement and Control System) is computer system which is used to monitor moving excise goods. The advantage of the system is certainly the ability to register products not only in the domestic area, but also to control the trade of products on the foreign market.

The system shall be used in particular to control products under the excise duty suspension arrangement (without tax paid) and shall apply i.e.:

  • alcoholic products,
  • energy products,
  • or tabacco products.

Revolution in excise duty?

The proposed amendments to the draft appear to be promising in terms of simplifying the applying of existing rules. An electronic e-DD document is to be used for this process to monitor the delivery of excise goods.

Furthermore, the scope of the controls will be extended to coal products which the supply out of principle is exempt from excise duty. It should be noted, that the documentation of movement will only be necessary for final entities purchasing large quantities of coal products.

In addition, the rules for controlling energy products by pipeline are regulated, the documentation of which will be made through an automated administrative document, e-AD, which improves the work by replacing previously used – paper documents.

The significant change sems also Central Register of Excise Duty Entities, as well as, the less complex registration of individuals or entities that consume tax-exempt excise goods. The worthy change is also the creation of the possibility of sharing movements outside the country of energy products that move by the rail transport.

However, taxpayers will be liability to report any changes to the data via the Electronic Revenue Portal and Customs Service (PUESC). This platform provides customs services and gives access to the SENT system (transport of goods monitoring system). It is worth noting that registration in SENT requires confirmation with a qualified electronic signature, trusted signature or advance electronic signature verified with a customs certificate.

Is it necessary to computerization excise duty?

The existing rules have not ensured an adequate degree of liquidity delivers in the current legal status. Until now, there has been no transitional period for a traditional delivery document. Equally, the issue of the release of aviation fuel from the tank, which is permanently mounted on the apron, was also not reflected here. An example would also be the lack of adequate rules for the supply of LPG gas to tanks of the supply metering installation on the estate. Moreover, the legislation introduced earlier did not provide for the possibility of controlling excise-exempt coal product, their imports and exports.

Numerous shortcomings have caused a cumulating of new doubts among entrepreneurs, who could not be sure of the proper application of the regulations.

It is worth to considering, the future benefits of computerization excise duty, where control could be more effective and sealing excise duty would bring the expected result. Undoubtedly, both taxpayers and tax authorities, expect a more transparent form of tax system, which is why the introduction of more modern rules can be a step towards the development of computerization in the tax system. However, the question arises: will the proposed changes actually translate into such development?