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Digital economy

17.11.2020

Decree on mandatory labeling of tobacco products has come into force in Kazakhstan since October 1, 2020. From April 1, 2021, the label applies to sticks, cigars, cigarillos, heated tobacco and alcoholic beverages.

Each batch of goods will be assigned a so-called Data Matrix Code, which is a means of identification. This is a 7 by 7 mm square sticker with white and black margins that is protected from forgery and has 29 characters that contain digital information about manufacturer or importer, serial number of the product batch, and other information necessary to control its movement. The code, thanks to cryptographic protection, cannot be forged.

It is applied to each pack of cigarettes as well as to each block.

When shipping, the manufacturer forms a certificate of acceptance and transfer of marking codes, which indicates the codes of marked products. The system contains data about aggregated packages and products that are embedded in them.

If cigarettes are imported, the importer, as a single operator, is given access to information system in order to obtain unique codes, and it provides transfer of marking codes to the manufacturer and/or integration of manufacturer's information system with the PLT IS (Product Labelling and Traceability Information System).

To date, Single operator is actively working to provide proposals for equipping retail outlets with 2D scanners in order to ensure the sale of labeled goods.

More than 34,000 pieces of 2D scanners have been sold since January 1, 2020, which means that 42% of the 80,000 retail outlets are ready to sell labeled cigarettes.

The disposal of stamp codes will be made by Operator of the cash register fiscal data.

In addition, sale of residues of unmarked tobacco products is provided for a year until October 1, 2021, according to the Order "On approval of the rules for labeling tobacco products" No. 927  of the Minister of Finance dated September 28, 2020.

Tobacco smuggling is one of the most "popular" categories of goods on the shadow market. According to experts, 1% of the tobacco market turnover that goes "into the shadows" costs about KZT 1.7 billion of unpaid excise taxes to the Treasury of Kazakhstan, and value of this percentage increases annually, in accordance with the growth of product price itself and amount of excise duty. In addition to budgetary losses, "shadow" tobacco exposes the health of consumers to additional serious risks. Labeling will be an effective tool for tracking sales of illegal cigarettes.

Currently, Kazakhstan is also implementing a pilot project on labeling of alcoholic beverages.

"The pilot project for labeling alcoholic beverages started on June 1, 2019. As part of this pilot project, the entire chain was tested from applying the code to withdrawing product from circulation. Planned date for introduction of mandatory labeling for alcoholic beverages is April 1, 2021", Kuanyshbek Yessekeyev, Chairman of the Board of Kazakhtelecom JSC, said at the Government meeting.




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