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Press Release

R10 billion in ‘dodged tax’, but no word of an arrest

Wednesday 21 February 2024 – TAX Justice SA has welcomed today’s Budget announcement that SARS investigations into the gold and tobacco industries has resulted in R10 billion in additional tax assessments – but now authorities must explain why no arrests or prosecutions of the kingpins have been made.

TJSA founder Yusuf Abramjee says: “Despite these eye-watering assessments that indicate industrial-scale tax evasion, no mention is being made of criminal charges let alone arrests.

“It is evident that gangsters controlling South Africa’s cigarette trade are being allowed to continue operating with impunity and no fear.

“While they do so, the nation will continue to be looted of over R27 billion in vital tax revenue annually by illicit cigarette barons. In fact, the new excise tax hike will force even more consumers to the illegal sector, driving the criminals’ market share beyond 80% and making us a world leader in lawlessness.

“Billions of rand in vital revenue that’s meant to pay for essential services like health, housing, education and electricity will instead be filling the bank vaults of gangsters as an inevitable result of this misguided and counter-productive move.”

Finance Minister Enoch Godongwana announced the R10 billion additional assessments “from key players in the illicit gold and tobacco industry” as he made a commitment to installing CCTV cameras in all cigarette factories in a bid to catch out the tax cheats.

The Fair-Trade Independent Tobacco Association (FITA) has gone to court to stop SARS placing the cameras in its members’ factories.

Abramjee said: “Instead of cooperating in the fight against economic sabotage, FITA and its companies are trying every trick in the book to prevent the CCTV installations. One has to ask… if they do not want to put in the cameras then what have they got to hide?

“The minimum tax payable on a pack of 20 cigarettes is now R25.05, but a number of locally manufactured brands are selling as low as R6 a pack as we speak. This is daylight robbery and we need a national inquiry to investigate how and why it is being allowed to go on, with not a single kingpin arrested.”