Friday 27 September 2024 – A NEW court ruling blocking the taxman from monitoring all cigarette factories “makes a mockery of justice” and is another boost for criminals robbing South Africa of R74 million in vital tax revenue every day, Tax Justice SA (TJSA) says today.
The South African Revenue Service (SARS) has just been denied the right to appeal an interdict which stops them installing CCTV on the premises of all licensed cigarette manufacturers.
The interim ban, imposed by the Pretoria High Court in May, is the result of legal action brought by members of the Fair-Trade Independent Tobacco Association (FITA) and other local tobacco companies.
Yusuf Abramjee, leader of TJSA, says: “This ruling makes a mockery of justice and gives free rein to criminals who are looting our nation on an industrial scale.
“The illicit cigarette trade is costing the country a staggering R27 billion in lost tax revenue annually. FITA’s interdict shields cigarette manufacturers from transparency and scrutiny, despite many of its members being prime suspects in the very trade SARS is attempting to curb.
“While criminals will be celebrating another boost for the gangster state, the South African people are the real victims of this ruling, as R27 billion in lost tax revenue could be used to improve healthcare, education and infrastructure.”
The main case against SARS is still to be decided by the Pretoria High Court and may ultimately go to the Constitutional Court for a decision.
“FITA needs to explain to the judges in the main case how so many of their members are able to sell vast quantities of their products at prices that do not even cover the tax,” Abramjee said.
“Until they come clean on that, all South Africans can only assume what they are trying to hide.”
An Ipsos survey in July showed that illicit cigarettes are now sold in almost two in every three stores across South Africa – the highest level recorded. The cigarettes are available at prices that are just a fraction of the minimum tax legally payable on them.
Tellingly, most of the illicit cigarettes bought in the survey were brands of FITA members challenging SARS’ legal right to install CCTV in their factories.
“The installation of CCTV cameras in cigarette factories is a critical measure to stem this bleeding of tax revenue,” Abramjee said. “We must question why FITA, an organisation representing licensed manufacturers, would go to such lengths to block efforts that would shine a light on the truth.
“The public deserves transparency and accountability, especially when such vast sums of money are being siphoned from our economy through illicit means.
“There should be a simple rule: install SARS cameras or lose the right to make cigarettes.”
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