Estimated reading time: 3 minutes
According to British American Tobacco South Africa (BATSA), the illegal cigarette industry deprives the South African economy of billions of Rand in desperately needed taxes.
Furthermore, according to BATSA, the South African Revenue Service (SARS) fails to use all the tools available to combat the illicit cigarette trade currently killing the legal market.
According to independent research, tax-evading cigarettes are now available in nearly half of all stores across the country. In light of this, SARS Commissioner Edward Kieswetter told Parliament’s Standing Committee on Finance on Tuesday, 9 November, that the problem is much larger than SARS and that dealing with it requires a whole-of-government response.
In response, BATSA General Manager Johnny Moloto said, “SARS has the power to tackle the manufacturers of illicit cigarettes and dramatically reduce the huge losses to our fiscus. But, for some reason, they are unwilling or unable to act.”
Production Counter Rules, according to Moloto, were implemented more than a year ago. This, he explains, should imply that all manufacturers are responsible for every cigarette they produce. “Yet SARS does not seem to be adequately enforcing their policy that would ensure these regulations are being followed.
“All manufacturers should demonstrate that they follow the Production Counter Rules or explain what they are trying to hide.”
According to a survey released on Tuesday by market researchers Ipsos, two-thirds of stores in four hotspot provinces are selling cigarettes for less than the Minimum Collectible Tax (MCT) of R21.60 per pack of 20.
“BATSA is calling for a minimum legal retail price for cigarettes of R28 per pack that would allow police to seize illegal cigarettes more effectively and give guidance to consumers to differentiate between legal and illegal products,” said Mr Moloto.
Additionally, Moloto says that BATSA is also urging the government to ratify the FCTC’s anti-illicit trade protocol as soon as possible. The FCTC Conference of Parties is meeting this week, and immediate ratification would send a strong signal to those who are hellbent on breaking the law.
“SARS officials told MPs on Tuesday that the biggest problem is not smuggling but illicit cigarettes being produced in this country. They know the problem, and they should know who is responsible. Instead of despairing, they should follow the money and apprehend the criminals who are syphoning billions from our battered economy.”
BATSA General Manager, Johnny Moloto
What are your thoughts on BATSA’s call for a minimum legal retail price of R28 per pack of cigarettes? Do you believe this will aid in the fight against the illegal cigarette trade?
Share your brain waves with us in the comment section below.
RELATED NEWS
