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Press Release

CCTV interdict is green light for R27bn tobacco tax looters

Thursday 16 May 2024 – A COURT order stopping the taxman from installing cameras in cigarette factories is a green light for gangsters to continue looting South Africans of R74 million every day, Tax Justice SA (TJSA) warns today.

A law allowing the South African Revenue Service (SARS) to install 24/7 CCTV in all cigarette warehouses has been interdicted by the Pretoria High Court following a case brought by several local producers, some of them represented by the Fair-Trade Independent Tobacco Association (FITA).

TJSA founder Yusuf Abramjee says: “This court order is yet another gift for the illicit tobacco barons who are robbing South Africa of over R27 billion a year by flooding the market with tax-evading cigarettes.

“For too long, these criminals have been able to flout the laws and hide their industrial-scale looting from SARS. Now they’ve been given a green light to step up this crippling theft of vital revenue that should be building a better South Africa for all.

“Cameras could be the game-changer that finally nails these tobacco tax cheats, yet FITA says they’re unfair. You have to ask, ‘What is FITA trying to hide?’”

Since August 2022, the Customs and Excise Act requires any warehouse used for manufacturing or storing tobacco products to be placed under “constant, continuous and permanent surveillance” via CCTV. The interdict stops SARS implementing this rule pending the outcome of a separate application seeking to set aside the rule.

A recent report by global analysts Oxford Economics found that the illicit cigarette trade is robbing the South African economy of R27 billion tax revenue annually. That equates to R74 million every day.

The excise research unit at University of Cape Town has stated that criminals’ share of South Africa’s cigarette market has sky-rocketed by 1100% in little over a decade. Cigarette makers represented by FITA include Carnilinx, owned by self-confessed tobacco smuggler Adriano Mazzotti.

“Kingpins in organised crime have been allowed to capture South Africa’s cigarette market and are stealing the tax money that should be spent on health care, schools and housing,” Abramjee says.

“SARS commissioner Ed Kieswetter says it is imperative that we halt the organised crime syndicates responsible – and their enablers – who are devastating our economy.

“Yet this interdict, and the failure of prosecutors to lay a single criminal charge against the alleged kingpins exposed in the Gold Mafia investigation over a year ago, reveals what a hole we are in.

“South Africans must stand up against crime to show we’ve not become a mafia state. We’re hopeful that the courts will uphold the rule mandating CCTV in cigarette factories. FITA must then declare which side it’s on, tobacco firms must install cameras or lose their licence to make cigarettes, and the National Prosecuting Authority must enforce the laws that are being abused by sophisticated criminal networks at the expense of honest, hard-working citizens.”