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Press Release

TJSA urges tobacco firms to back charter to defeat illicit trade

By November 19, 2021No Comments

Wednesday 17 November 2021 –  TAX Justice South Africa (TJSA) is demanding that all tobacco firms sign up to its new charter to defeat the rampant illicit cigarette trade that’s robbing the country of billions of rand.

In the wake of its explosive undercover investigation that exposes widespread tax evasion in the industry, TJSA today launches a five-point action plan to tackle the world’s biggest black market.

TJSA founder Yusuf Abramjee said: “Our research shows criminal manufacturers are flooding shops across South Africa with illicit cigarettes that last year deprived the Treasury of R19 billion in excise alone.

“These industrial-scale looters are public enemy number one and it should be a national priority to bring them to justice.

“We need an official inquiry into the whole industry and the immediate enforcement of regulations already at the disposal of SARS (South African Revenue Service).”

The TJSA charter to combat illicit cigarettes calls for:

  • Immediate adoption of SARS’ CCTV policy to let officials monitor production at all cigarette factories

  • Closure by SARS of any factory producing brands of cigarettes found selling beneath the Minimum Collectible Tax (MCT) level of R21.60 per pack

  • The arrest and prosecution of those running these companies, seizure of their assets and the return of the looted billions to their rightful owners – the State and its people

  • A minimum legal price for tobacco products at retail level of 30% above MCT, below which they are automatically recognised as illegal and instantly seized

  • A national inquiry into the South African tobacco industry that will rid us of the scourge of illicit cigarettes once and for all

TJSA’s latest investigation, published on Tuesday, shows illicit cigarettes being sold in massive volumes in shops across the country.

A TJSA researcher, using a hidden camera, was easily able to buy mastercases (500 packs) at up to four times below the legally feasible price.

Brands bought below MCT included those belonging to Zimbabwean tobacco giant Gold Leaf (GLTC) and members of the Fair-Trade Independent Association (FITA).

Abramjee said: “Our investigations have shown yet again that it’s the usual brands being sold at illegal prices in volumes which prove foul play. Yet, as always, the brand owners wash their hands of these products. They must be called to account once and for all.

“Every tobacco manufacturer, from the multinationals to FITA members and GLTC, should back  our charter against illicit trade and show they’re compliant with SARS’ production counter regulations. Otherwise, what have they got to hide?”

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