Wednesday 9 November, 2022 – DAMNING new evidence shows criminals are tightening their grip on South Africa’s cigarette trade and only drastic, emergency action can halt them looting billions of rand in vital state revenue, Tax Justice SA warns today.
The latest study by independent market research giant Ipsos shows shops nationwide are still being flooded with illicit cigarettes despite much-publicised actions by the South African Revenue Service (SARS).
“It’s clear that the criminal cigarette manufacturers are winning this battle with SARS and continue to pocket over R19 billion a year in stolen taxes,” says TJSA founder Yusuf Abramjee.
“More than two years after the illegal tobacco sales ban enriched and empowered their sophisticated illicit networks, they’re proving impossible to remove.
“The masterminds are making billions, which they siphon into offshore havens, while ordinary, honest South Africans struggle to receive basic, essential services.
“South Africa must be saved from this merciless plunder. We need emergency sanctions against these transnational organised crime groups to shut them down once and for all.”
Ipsos found that illicit cigarettes are being sold in up to four out of five stores in hotspot provinces. A pack of 20 can be bought for as little as R7, less than one third of the minimum taxes legally due on them.
Chief offenders are brands owned by Zimbabwe-based tobacco giant Gold Leaf (GLTC). Brands belonging to Carnilinx and Best Tobacco, who are members of South Africa’s Fair Trade Independent Tobacco Association (FITA), also lead in this illegal price war.
“Although SARS has a court order to freeze Gold Leaf’s assets, their brands are still freely available at illegal prices all over the country,” says Abramjee.
“Authorities must follow the money to catch the kingpins who are getting breath-takingly rich from this economic sabotage. It’s a national emergency and only swift and drastic action can rescue us.”
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