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Press Release

FITA has questions to answer on Finance Minister’s illicit trade revelations

Thursday 24 February 2022 – THE Fair-Trade Independent Tobacco Association (FITA) must be made to answer urgent questions following the Finance Minister’s revelations about the illicit cigarette trade, Tax Justice SA (TJSA) demands today.

In his maiden Budget speech, Enoch Godongwana highlighted the growing menace of tax-evading tobacco and promised increased action to combat criminal manufacturers who are robbing the country of billions of rand.

The South African Revenue Service (SARS) has cancelled the trading licences of three operators, liquidated another and has eight cases lined up for criminal prosecution, he added.

TJSA founder Yusuf Abramjee said today: “FITA purports to represent the South African tobacco industry and says it opposes illicit trade, yet it is strangely silent about who these rogue operators might be.

“Meanwhile, cigarette manufacturers represented by FITA have mysteriously disappeared from its members list and some appear to have shut down completely without any explanation.

“If FITA is honestly fighting illicit trade, it is duty-bound to call out members who are operating illegally and flooding the market with tax-evading cigarettes that rob the fiscus and destroy legitimate businesses.”

Undercover investigations carried out by TJSA over the last 15 months found huge volumes of cigarettes being sold across the country at prices that mean due taxes are not being paid. A large proportion of these illicit cigarettes were brands belonging to FITA members.

“When we asked FITA to explain how their members’ brands were involved, they refused to comment,” said Abramjee. “When we approached the members directly, it appeared they had shut down or moved their operations.

“Why is FITA choosing to stay silent about this? What has it got to hide? The Finance Minister revealed that R350million worth of illicit tobacco has been seized during the pandemic, but he knows – and FITA knows – that this is just a fraction of the billions being plundered by criminal manufacturers.

“As a matter of urgency, FITA must be made to answer if any of its members – current or former – are implicated or among the rogue operators listed by Mr Godongwana.

“The Minister’s speech has been dubbed the Good News budget, but the best news for our economy would be a national inquiry into the industry that FITA claims to represent.”