Wednesday 16 July 2025 – TAX Justice SA today welcomes the Government’s acknowledgment of the devastating scale of the illicit cigarette trade and urges authorities to now crack down on the crime syndicates behind this menace that is robbing the country of R28 billion a year.
Finance Minister Enoch Godongwana spoke out about the catastrophic economic impact of illicit tobacco in the wake of an Ipsos report showing that tax-evading cigarettes are now on sale in three out of every four stores nationwide.
The Minister’s acknowledgment that South Africa is struggling to plug a hole leaking R100 million a day as a result of illicit cigarettes validates years of warnings by Tax Justice SA about the true scale of this crisis.
“We welcome the Minister’s belated recognition of what we’ve been saying for years – that criminal syndicates in the illicit cigarette trade are bleeding our economy dry,” said Yusuf Abramjee, founder of Tax Justice SA.
“But acknowledgment without action is worthless. The time for hand-wringing is over – we need arrests, prosecutions and decisive enforcement.”
The comprehensive Ipsos study of 4,696 outlets nationwide reveals that illicit cigarettes are now sold in 76.6% of stores – almost triple the rate from three years ago – with packs selling for as little as R5, less than one-fifth of the legal minimum tax of R26.22.
Most alarmingly, the study shows that brands owned by Gold Leaf Tobacco Corporation (GLTC) – the company at the centre of Al Jazeera’s explosive Gold Mafia documentary – are now the cheapest available in almost half the stores visited (2,021 outlets).
Despite facing a R3 billion tax claim from SARS, Gold Leaf appears to have dramatically expanded its operations, with 89% of its products sold at or below the legal tax threshold.
“The audacity is breathtaking,” said Abramjee. “While SARS pursues Gold Leaf for R3 billion in unpaid taxes, their brands are growing their share of the illicit cigarette market. That essentially means that it’s using SARS’ own money to pay its SARS penalties, while law enforcement watches from the sidelines.”
Despite more than 100 suspects being referred to law enforcement agencies since 2020, not a single criminal charge has been brought by the Hawks or National Prosecuting Authority against members of the Gold Mafia network.
The study also exposes widespread tax evasion among other licensed tobacco companies, with more than a third of illicit purchases being brands from companies that are actively resisting SARS’ legal right to install 24/7 surveillance cameras in their warehouses.
These firms include Carnilinx, a principal member of the Fair Trade Independent Tobacco Association (FITA). More than 94% Carnilinx brands purchased were sold at illicit prices.
Other litigants against SARS, and the percentages of their brands sold below MCT, are: Best Tobacco (94.4%), Afroberg (95.5%), United Tobacco (100%), Amalgamated Tobacco Manufacturers (100%), Folha (100%), Protobac (100%), Bozza (100%) and Harrison (100%).
“We’re witnessing the complete collapse of tax compliance in the tobacco sector,” said Abramjee. “These aren’t just regulatory violations – this is organised crime on an industrial scale, stealing money needed for schools, hospitals and social services.
“Minister Godongwana’s acknowledgment of this crisis is a start, but South Africans need action, not just words. Every day of delay means millions of rands stolen from our people. The time for excuses is over – we need justice.”
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