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Press Release

Don’t let up in war on R19bn tobacco tax looters

Sunday 11 September, 2022 – CORRUPTION busters must guard against complacency in the fight against South Africa’s rampant illicit cigarette trade despite a landmark legal breakthrough, Tax Justice SA warns today.

The state’s freezing of assets belonging to Zimbabwean-owned giant Gold Leaf Tobacco Corporation (GLTC) has been widely acclaimed, but it is just a single victory in the war against criminals who are stealing R19 billion a year in vital tax revenue.

Setting out a three-point plan to win that war, TJSA calls for:

  • Stronger enforcement at our borders
  • SARS inspectors at every cigarette factory
  • Shutdown of any factories making brands sold at legally impossible prices

“Since the very welcome and encouraging action by the South African Revenue Service (SARS), much time has been wasted debating the exact size of the illicit cigarette industry,” says TJSA founder Yusuf Abramjee.

“Whether it’s two in every three cigarettes that’s illicit or one in every two, that’s a topic for the academics. Inarguably, that illegal industry is huge and South Africa now has one of the world’s biggest black markets in cigarettes. Shops nationwide are still flooded with cigarettes selling at prices that prove taxes are not being paid.

“Instead of splitting hairs, authorities should be splitting open the elaborate organised crime networks that are amassing hidden fortunes from illicit tobacco at the expense of honest, hard-working citizens. SARS must ensure that GLTC and other rogue manufacturers will no longer be allowed to peddle tax-evading products.”

TJSA’s call to action is made in Smoked Out, a video report of its efforts to expose the illicit cigarette trade and the breakthrough against GLTC.

On 26 August, SARS took charge of bank accounts, premises and all other assets owned by GLTC and its directors Simon Rudland and Ebrahim Adamjee.

SARS is now seeking to recoup more than R3billion in unpaid taxes from GLTC’s plunder network, which is said to involve the smuggling of huge volumes of gold, as well as tobacco, an elaborate money-laundering operation, the corruption of officials at a national bank, and the illegal siphoning of billions of rand to offshore havens in Dubai and Switzerland.

Andy Mashaile, a TJSA director and Interpol ambassador, says: “This is tax justice in action. It’s a reminder that civil society mustn’t stop demanding a better and safer future for all South Africans.”

Makali Lepholisa, a TJSA director and former Lesotho Customs Commissioner, says: “SARS has faced many challenges in recent years. With dedicated staff now throughout its leadership, it’s encouraging to see SARS regaining the skills and capacity to root out wrongdoing. But it still has a long way to go and there’s much work to do.”

Abramjee adds: “The importance of the High Court order against Gold Leaf cannot be overstated. People who take billions and billions of rand out of this country and out of the pockets of South Africans have had their company taken over by the South African state. That is huge.

“But it’s not just one manufacturer that’s getting filthy rich out of illicit cigarettes. We need even more action against this scourge. We need to show that crime does not pay. And we need to see the masterminds looting our nation finally forced to wear orange overalls.”

WATCH the new TJSA video report here >>>>>>