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Surge in illegal cigarette sales

Johannesburg - As many as 10 million illegal cigarettes are sold in South Africa every day.

South African Revenue Service (Sars) figures to March last year show that the cigarette black market was 23% up on the year before.

The illegal industry is assuming dramatic proportions, despite dogged attempts by authorities and the legitimate industry to combat it.

Last year Sars' customs division executed 2 900 raids and seized R215m worth of illegal cigarettes.

If a packet of cigarette costs less than R9, it is illicit.

Every year the illicit trade drains R4bn from the South African economy, while the global cigarette black market trade is worth about R660bn a year.

These statistics were provided by the Tobacco Institute of South Africa (Tisa).

Health ministries worldwide are imposing increasing regulation on the industry, adding a great deal to the cost of legal compliance.

Tisa CEO Francois van der Merwe said it is significantly more expensive to manufacture cigarettes today.

The aim of the ministries to get people to smoke less is noble, he says. Smoking is bad for one's health. Tisa admits it.

But the result is too much taxation and excessive regulation. And the unintended consequence: the black market trade.

The biggest consignments of illegal cigarettes come from Zimbabwe and China.

- Sake24.com

For business news in Afrikaans, go to www.sake24.com.

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