Tax watchdog moves to curb cigarette smuggling

Thupeyo Muleya Beitbridge Bureau

South Africa’s tax watchdog, the Tax Justice South Africa (TJSA), wants tobacco companies to sign on to its new charter to end illegal dealings and smuggling of cigarettes that rob South Africa of billions of rand.

The smuggling of cigarettes to South Africa is rife because of the high tobacco taxes in South Africa, R6,21 for 10 sticks, that give large profits to smugglers, the argument used by Zimbabwean manufacturers who point out that they are selling directly to smugglers, but to wholesalers and retailers in Zimbabwe after they have paid their Zimbabwean taxes.

So most of the untaxed cigarettes in South Africa, with Pacific, Remington Gold, Mega, Dullahs, Branson, and Servilles are from Zimbabwe.

TJSA founder, Mr Yusuf Abramjee, said they had come up with a five-point action plan to tackle the world’s biggest black markets.

“Our research shows that criminal manufacturers are flooding shops across South Africa with illicit cigarettes, that last year alone deprived the Treasury of R19 billion in excise duty,” he said.

“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 the immediate adoption of SARS’ CCTV policy in South African factories to let officials monitor production at all cigarette factories and the closure by SARS of any factory producing brands of cigarettes found selling below R21,60 for a 20 cigarette pack.

“We are also calling for a national inquiry into the South African tobacco industry that will rid us of the scourge of illicit cigarettes once and for all,” he said.

The officials said they conducted investigations recently into the illegal trade of which is being done in massive volumes in shops across the country.