MSPs will today call on The Scottish Executive to oppose, in the Scottish Parliament debate, plans by the UK government to introduce paper tax stamps on whisky bottles.

MSPs are expected to highlight the damaging impact the stamps would have on Scotch Whisky's competitiveness at home and abroad, and the proven ineffectiveness of similar measures overseas in halting fraud. 

The Scotch Whisky Association (SWA) has welcomed the motion saying the tax stamp proposal, which was announced in the December 2003 Pre-Budget report, would reduce productivity and increase costs at the same time as concerns are being expressed about the general competitiveness of Scottish business. 

Gavin Hewitt, SWA chief executive, said: "Fraud must be defeated but paper stamps over the top of a whisky bottle is a 19th century attempt to beat 21st century fraudsters.  Experience shows that strip stamps do not work, and that they have been rejected or abolished by countries around the world.  They make a mockery of the government's commitment to reduce red tape and costs on industry. 

"Tax stamps are opposed by the whole spirits industry.  They would be a hammer blow to Scotch producers, in particular smaller distillers, with compliance costs running into millions of pounds. Competitiveness at home and abroad will be badly damaged. 
 

"We have serious doubts about the government estimates of spirits fraud, which equate to 200,000 illegal bottles of spirits being sold in the UK every day.  Other government and commercial figures suggest fraud to be both significantly lower than quoted and to be falling thanks to the success of on-going government and trade collaboration and existing anti-fraud measures. The hard evidence is not there, and the case for tax stamps is therefore totally unproven.

Hewitt added:  "Distillers are committed to fighting fraud.  In the run up to the March Budget, we are proposing to the UK government what we believe is a range of more effective measures, including the better use of existing systems, improved controls on the movement of goods and use of duty guarantees, and risk-based targeting of illicit trade, which will stamp down on the fraudster without damaging legitimate traders.  This better co-operation between Customs & Excise and the industry is the real solution to tackling fraud.

"We welcome today's debate and trust MSPs will persuade the Executive to take the issue up at the highest levels in the UK government."