Monday 27 April 2020 – TAX Justice South Africa (TJSA) is urging law-abiding citizens to join the fight against criminals looting our nation when cigarettes go back on sale from Friday.
TJSA founder Yusuf Abramjee says: “Very few people realise that, for many years now, illicit cigarettes have been openly displayed for sale at local stores and account for a third of all cigarettes sold in South Africa.
“These cigarettes are supplied by crooks, who don’t pay the tax that makes up most of the price of the legal product and have been stealing R8 billion from the state every year.
“During the lockdown ban on tobacco products, criminal syndicates have used their sophisticated networks to keep trading and enriching themselves.
“Government figures show that one in every four people in informal settlements have been able to buy cigarettes in this period, and throughout the country cigarettes have been four times more accessible than alcohol.
“The cigarette syndicates will be emboldened by this and keen to capitalise when the ban is lifted on 1 May so they can continue pocketing taxes desperately needed by our nation to fight the coronavirus, provide relief for the vulnerable and rebuild our economy.
“Decent citizens should report evidence of any illegal trading and make use of the free anonymous tip-off line set up by the Consumer Goods Council of South Africa, which is 0800 014 856.
”Any packet of cigarettes priced R25 or less should be considered illegal,says Mr Abramjee. The excise (R17.40) and VAT (R3.26) leave a margin of no more than R4.34 to be shared by manufacturer, wholesaler and retailer.
“No one can afford to sell at that price. Anyone who does so must be keeping the due taxes for themselves.
“Whatever you think about smoking, legally sold cigarettes contribute hugely to the fiscus, and the Treasury has been losing R35 million in excise revenue on each day of the tobacco ban so far.
“We need that money now more than ever as the Government seeks to fund its R500 billion coronavirus relief package.
“Police must continue enforcing the trading laws, we need strong border control -particularly at the Zimbabwe frontier, where smuggling activity has sky-rocketed – and we need strong audits at tobacco factories going forward.
“Illegal traders across several sectors of the economy, from clothes to medicines,are systematically looting the nation of R100 million every day.
“If we are going to defeat the virus and rebuild a better South Africa for all, we must defeat the cynical criminals in the illicit economy who currently threaten our very survival.”