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Press Release

SA’s illicit trade explosion is talk of the world

Wednesday 28 April 2021 – THE explosion in illicit trade caused by South Africa’s lockdown bans on alcohol and cigarettes has grabbed the attention of the world.

Major international press today reports that this disastrous pandemic policymaking “offers a case study in the effects of prohibition”.

“Legitimate drinks and tobacco players took an instant economic hit as their customers turned to illegal supplies,” says an article in the influential Financial Times. Meanwhile, the SA government lost almost R40 billion in tax revenue, it adds.

While cutting the number of hospital trauma cases was a motive for the alcohol restrictions, “there appeared less justification for the tobacco sales ban — and the long-term effects of illicit trade may prove even greater than that for alcohol,” the report concludes.

Experts are quoted branding the prohibition a “farce” and links are drawn to State Capture, described as “South Africa’s biggest post-apartheid scandal”.

Tax Justice SA founder Yusuf Abramjee said today: “As we predicted, our lockdown bans have fuelled a devastating explosion in illicit trade that is now the talk of the world.

“Our government has helped to create the biggest black market on the planet, in which three out of four retail outlets now sell illicit, tax-evading cigarettes. Now ministers have a duty to tackle this monster before it does further damage to our economy.

“We must have a national inquiry into the cigarette industry that brings to justice the criminals who are illegally making billions from this scourge.”