Tuesday 5 August 2025 – TAX Justice South Africa has welcomed a High Court judgment confirming a preservation order against Amalgamated Tobacco Manufacturing, and 19 other entities, who are accused of a sophisticated multi-million-rand tax evasion racket.
The KwaZulu-Natal High Court has dismissed challenges to the South African Revenue Service’s preservation order, allowing SARS to continue securing assets while investigating more than R96 million in suspicious financial transfers involving the Pietermaritzburg-based cigarette maker.
“This case demonstrates exactly why SARS needs robust investigative powers and why the illicit tobacco trade continues to devastate our fiscus,” said TJSA founder Yusuf Abramjee. “When a court finds a tobacco manufacturer has a case to answer over millions in under-declared income, it confirms what we’ve been saying for years – the industry is riddled with tax dodgers who are bleeding our country dry.”
Significantly, Amalgamated Tobacco – as well as local industry body the Fair-Trade Independent Tobacco Alliance (FITA) – is fighting SARS’s legal right to install surveillance cameras in cigarette factories.
“Now we know what they’re trying to hide,” Abramjee said. “While legitimate manufacturers should welcome transparency measures, those opposing surveillance systems clearly have something to conceal. If the allegations in this case are true than it will vindicate SARS’s approach to enhance monitoring of the tobacco sector.”
The illicit cigarette trade now commands more than 70% of the South African cigarette market, robbing the country of approximately R30 billion in tax revenue annually. This massive revenue loss undermines public health initiatives, education funding and essential government services.
“This R96 million case is just the tip of the iceberg,” Abramjee warned. “The Government must ensure that SARS has the resources to expand these investigations to other major players in the illicit tobacco trade. The scale of the problem demands equally scaled enforcement action.”
TJSA has renewed its calls for:
- Comprehensive audits of all major tobacco manufacturers and distributors
- Enhanced surveillance measures in tobacco factories
- Stronger penalties for tax evasion in the tobacco sector
- Greater cooperation between SARS, law enforcement and the National Prosecuting Authority
“Every rand stolen through tax evasion is a rand taken from schools, hospitals and housing programmes,” Abramjee said. “The people of South Africa deserve nothing less than full accountability from the tobacco firms who have shown contempt for the law for too long.”
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