Monday 23 February 2026 – Finance Minister Enoch Godongwana should think twice before raising “sin” taxes in Wednesday’s Budget if government is serious about tackling illicit trade, Tax Justice SA warns today.
South Africa’s illicit economy is draining an estimated R100 billion a year from the fiscus – around R250 million every single day.
TJSA leader Yusuf Abramjee says raising excise duties without first fixing enforcement will simply push more consumers into the hands of criminals.
“You cannot tax your way out of a crisis you refuse to police,” he said. “Every reckless hike in excise makes the illicit traders richer and the taxpayer poorer.”
Criminals now control 75% of the country’s cigarette market, costing the state more than R30 billion in lost tax revenue annually. The illicit alcohol trade strips out a further R16.5 billion each year, with illegal products now accounting for roughly 18% of total consumption.
Abramjee says the numbers speak for themselves. “When three in four cigarettes are already illegal, hiking taxes makes no fiscal sense,” he said. “They’re a gift to the kingpins in organised crime, who don’t pay any taxes and are effectively being subsidised by honest, hard-working South Africans.”
President Cyril Ramaphosa pledged in his State of the Nation Address to clamp down on illicit trade. TJSA says that promise must be matched by action before any further tax increases are imposed.
Abramjee said: “Government says it wants to shut down the illicit economy. Then it must start by shutting down the syndicates. If you raise taxes with first fixing enforcement, you simply raise criminal profits.”
TJSA urged Treasury to prioritise enforcement, border control and prosecution capacity to reclaim billions in lost revenue. One immediate measure would be to force manufacturers to allow SARS’ TV monitoring in their factories if they want a licence to make cigarettes.
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