The Information System on Excise Duties (hereinafter ISED) is a web-based system for administration of excise duties. The system was developed for the Lithuanian State Tax Inspectorate (hereinafter STI) and launched in 2002. ISED helped to improve the administration of duties due to more strict data control, the payers of excise duties now are provided with a more convenient electronic media based method of filing declarations and reports. The system also contributed to significant reduction of the manual work volume for the STI. ISED is available to users 24/7, 365 days a year via the Internet.

Policy Context

Lithuania is actively involved in the process of development of more effective e-government. In 2001 the Law on Excise Duty of the Republic of Lithuania was adopted which complied with the provisions of Directive 92/12/EEC on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products. Before starting the implementation of this law, after the authority in charge of the administration of the excise duty proposed and the Government approved of the funding, the development of the Excise Duty Information System, as the main excise duty administration mechanism, was commenced. The ISED fully met all the needs of business undertakings in issue of document AAD (the accompanying administrative document provided for by Commission Regulation (EEC) No 2719/92 on the accompanying administrative document for the movement under duty-suspension arrangements of products subject to excise duty, hereinafter referred to as “the Regulation”) for movement of products subject to excise duty, as established by Commission Regulation 2719/92/EEC, encouraging free movement of products subject to excise duty in Lithuania, and upon the EU enlargement on 1 May 2004, new functionalities necessary for movement of products in the territory of the Community were added to it. This system has been constantly developed in implementation of EMCS functionalities of the integrated computerised system being installed following Decision No 1152/2003/EC of the European Parliament and of the Council of 16 June 2003 on computerising the movement and surveillance of excisable products, in the field of control over monitoring and movement of excisable products in application of the regime of temporary postponement of excise duty payment and is used as a database in SEED, EWSE and MVS systems and during installation of e-AAD.

Description of target users and groups

The system covers all state institutions and commercial companies involved in excise activities, which can be divided into three levels: 1. Central tax administrator, i.e. State Tax Inspectorate 2. Regional (county) tax inspectorates, the number of which totals ten. These institutions cover the activities of excise duty administration specialists. 3. Duty payers. These are represented by companies or their units dealing with the purchase, production or sales of excisable stock. The total number of such companies in Lithuania makes up about 500.

Description of the way to implement the initiative

Due to it's nature, ISED requires constant attention and support. Therefore STI employs special proactive risk management methods which allow ISED to be operational 24/7, 365 days a year. Proactive risk management tools include Oracle Enterprise Manager and specialised software for system-wide monitoring. The service provider employs quality management methods to ensure that only thoroughly tested code is incorporated into production system. Multi-channel issues: ISED tackles three types multi-channel issues – registration of excise product movement documents, control of application of excise exemptions for agricultural subjects and mobile inspection of transportation of excise products. Excise product movement documents are usually registered online. This, however, is rather complicated for users that are based rural areas and using dial-up connections. Therefore they have a possibility to create these documents offline according to a specified XML format and import them later into the system. Agricultural subject have excise duty exemptions for certains quantities of diesel fuel designated for agricultural use. Filling stations must register all sales of such fuel and then provide detailed reports to the regional tax administrator. Very few of such filling stations have Internet access therefore these reports are being prepared offline and imported later into the system. Movement of excise products is being controlled all over the coutry therefore police officials, customs officers and tax inspectors can check validity of excise product document by sending an SMS message to a designated number.

Main results, benefits and impacts

ISED is a further step towards the establishment of Information Society in Lithuania and a widening of the range of services provided by electronic business. Upon the implementation of a centralised system on excise duties, the administration of duties has improved due to more strict data control. The standard-based entering of data involving the use of electronic media enables the automatic correction of errors which has significantly reduced the need for STI workforce, as well as reducing the number of errors made by duty payers and facilitating the identification of law violation attempts. The payers of excise duties now are provided with a more convenient electronic media based method of filing declarations and reports. Therefore, it has reduced the number of manually completed documents, delayed submissions and unintended errors. Since the ISED system is available via the Internet 24 hours per day, it may be accessed from any place and the documents may be submitted at any time convenient. With respect to data completion operation, the introduction of ISED helped to reduce the work volume of manual work for STI several times over, since the system is oriented towards single entry and multiple uses of data. The loading of original data into the system allows the wide application of information import from files or direct data exchange through the interface with databases operated by STI and other institutions (e.g. Agricultural Cadastre). Since the system is designed to perform financial operations by individual subjects, a specialised authorisation system has been created. Within the framework of implementing the new provisions of the Law on Excise Duties revised in 2004, Alna Software has basically modified ISED and significantly expanded the system functionality in compliance with the revised legislation and the European Union (hereinafter EU) standards on the exchange of data between information systems. The major modification added to the system is associated with the facility of integration with EU excise administration systems, enabling the exchange of information on excise activity subjects and movement of goods within EU Member States. There have also been established data interfaces with the Integrated Tax Inspectorate System (hereinafter ITIS) and Electronic Declaration System (hereinafter EDS) and expanded the components of reports and analysis. Innovation: The main advantage of ISED is automatic detection of any mismatches between the data available to the tax authorities and information provided by excise duty payers. ISED provides innovation in real-time monitoring of the movement of excise products, automated on-line, web-based capabilities that allow import and export of data from and to the System for Exchange of Excise Data, management of EWSE (Early Warning System) and MVS (Movement Verification System) messages. ISED is the first national excise information system in the EU that was fully compatible with the EU excise information systems (SEED, EWSE, and MVS).

Return on investment

Return on investment: Not applicable / Not available

Track record of sharing

The STI always welcomes interest in ISED and has presented the system to interested EU partners via Fiscalis programme (2003 - 2007) on two occasions. In 2004, ISED was presented to the Fiscalis Enlargement programme partners from Denmark, Estonia, Finland, Germany, Latvia, Sweden and Poland. In 2006, a presentation on ISED was given to the Fiscalis Exchange programme partners from Germany, Hungary, Latvia, Portugal, Romania, Slovakia, Slovenia and Spain. On both occasions various aspects of ISED usage, operation, workflows and best practices were discussed.

Lessons learnt

1. Excise system architecture development and implementation experience. 2. Real-time monitoring solution of the movement of excise products. 3. Integration practices with central Excise information systems of the EU. Scope: National, Regional (sub-national)