Govt seeks to stub out illegal cigarettes
Fin24

Govt seeks to stub out illegal cigarettes

2014-04-25 05:30

Cape Town - South Africans smoked eight billion illicit cigarettes last year, most of them manufactured illegally inside the country.

"One in three cigarettes smoked each day in this country are illegal," Tobacco Institute of SA (Tisa) chief executive Francois van der Merwe told reporters in Cape Town on Thursday.

The loss to government in revenue last year was about R5bn.

Van der Merwe was speaking at the end of a high-level meeting in Cape Town, called by government, on the illicit trade in tobacco products.

The meeting, which was closed to the media, included senior officials from the departments of trade and industry, and justice, the SA Revenue Service, the police, and representatives from the tobacco industry.

Eliminating the illegal trade

Deputy International Relations Minister Marius Fransman also attended. He told reporters discussions had revolved around co-operation to eliminate the illegal trade in cigarettes in South Africa.

According to Tisa, the number of illegally-manufactured cigarettes sold locally has "exploded" over the past six years.

"Although some 700 million illicit cigarettes were seized during 2013, this is the tip of the iceberg in relation to the scale of the problem," it said in a background document released before the meeting.

Almost 60% of illegal cigarettes found in the South African market were manufactured locally, while about 38% were smuggled into the country from Zimbabwe.

Weak border control

In the document the problem is attributed to corruption and weak border control, and a lack of awareness among consumers.

"[Consumers] do not realise that by purchasing cheap illicit cigarettes they are effectively part of the crime trade."

A recent Interpol report had linked illicit cigarette trade to criminal syndicates involved in the illegal drug, arms and human trafficking trade.

Van der Merwe said the tobacco industry was a significant contributor to the South African economy. The illicit trade had led to a "serious financial loss to government" in terms of lost taxes.

"According to independent research, 30% of the total cigarette market is illegal - that is about eight billion cigarettes in a year, or a million packs per day, that are smoked in this country are illegal."

R18bn lost in taxes

Since 2010, "our government has lost more than R18bn in taxes alone, due to illicit cigarettes".

Responding to questions, he said illegal cigarettes were those that typically sold for about R10 a packet.

Fransman said more discussions on how to tackle the problem of illicit cigarettes would be held six months from now.

Among solutions being considered were tightening up legislation and speeding up the justice process for those caught trading in illegal cigarettes.

Comments
  • Evan Brent Connock - 2014-04-25 06:08

    I know, what can we do so we don't have to address real crime ... You know like corruption, brutal farm murders, rape! Let's chase after people selling illegal cigarettes, yes, that's it, and who knows maybe we can make ourselves a little pocket money with bribes and the like!

  • Abanya Way - 2014-04-25 06:12

    Let me get this right.. If 1 in 3 cigarettes is illicit and 8bn were smoked then that means 24 billion cigarettes were smoked in SA last year or 6,5 million EVERY DAY! If the government lost R5bn on 1/3 of the cigarettes so that means they made R10bn in taxes. The figures are staggering. One wonders if the government's anti tobacco campaign is genuine or just blowing smoke up our fundament.

  • Henni Bisschoff - 2014-04-25 06:18

    Concentrate on wiping out corruption from Zuma down and the rest will sort it self out !!!

  • Mark Hicks - 2014-04-25 06:22

    Clearly our esteemed leaders haven't got enough tax money to plunder between themselves. A few billion more might just keep the upper echelon of government well housed, well fed and just pampered like they deserve, after all, they fought for our freedom - admittedly many were in exile, living it up overseas and attending almost any university for free... Shame...

  • Trudi Roos Potter - 2014-04-25 06:27

    In our town counsil members want SUV s because the bad roads are damaging their cars. Duh! I like the word plundering.

  • John Stoltz - 2014-04-25 06:38

    Dear Government, why not concentrate your efforts on stubbing out drug imports/smuggling in the country?? Or are there some prominent figures involved like a certain Minister's wife??? Just asking!!

  • Shrian Ramsamuj - 2014-04-25 07:00

    This article makes me happy. I hope they never find the sources of the illegal cigarettes. Being taxed the way we are, the portion of tax is more than the cost of the cigarattes themselves. How else can they be sourced for a significantly lower value? This is one of the many taxes feeding that fat pig Zuma and his ugly wives.

  • Ivan Van Der Merwe - 2014-04-25 07:10

    Govermoont created the problem. The people have spoken, they also want cheap pleasures.

  • Jimmy James - 2014-04-25 07:21

    THAT FILTHY DEADLY WEED THAT KILLS!!!

  • Philip Schalkwyk - 2014-04-25 07:31

    How can it be a crime to buy a packet of cigarettes? are we meant to ask the supplier whether they are illegal or not? The government created the problem by over taxing cigarettes, now must deal with the loss of revenue!!

  • Ian Harrison - 2014-04-25 07:41

    Simple: reduce the price of cigarettes so that people can afford to buy recognised brands.

      Jabu Mthembu - 2014-04-25 08:47

      yeeessssss!

  • Nigel van Ysendyk - 2014-04-25 07:52

    This is how China invests in Africa, they have their products smuggled in & take over local jobs, they have seized Zibabwe thanks to the delusional fool Bob & now they are setting their eyes on the largest economy in Afirca, oh make that 2nd largest now since the ANC let Nigeria overtake us.

  • Michael Horn - 2014-04-25 07:58

    Why govt doesn't stub out the dagga abuse that causes mental illness and addiction and alcohol abuse. CLOSE DOWN THE TAVERNS AND STOP THE ALCOHOL ADVERTS ON TV!!!!!

  • ReaperAJ - 2014-04-25 08:47

    I'm so glad I gave up smoking in January. The government can suck eggs now, they're not taxing me to death on my bad habit anymore. Shove the middle finger at them, give up the habit, get healthier. They aren't counting on that.

  • Peter Woods - 2014-04-25 08:52

    Aaaah yes.we will protect big business.

  • Marlon Willemse - 2014-04-25 09:07

    There are more burning issues..FFS!!!

  • Tawizee - 2014-04-25 09:31

    I still don't understand why locally made cigarettes are much more expensive than those that have been transported thousands of miles to be here.

  • Mike Immelman - 2014-04-25 09:32

    An obvious result of excessive customs , excise duties and VAT. All that is necessary to stamp out this smuggling is to reduce the taxes. The brains trust wants to remove the brand labeling on packets, so then the smuggled and legal goods will look identical as well.

  • C'fiso ToomuchSwagg Mu-Ta Wung - 2014-04-25 09:50

    Still they all gonna kill you! Smoking kills!!

  • Seratus Sestertii - 2014-04-25 10:01

    About time! All those people saying this problem is because the sin tax is too high do not know what they are talking about. SA cigarette tax is a fraction of what it is in the UK, yet the UK does not have an illegal cigarette problem because their administration, policing and law enforcement function properly.

      Carl Nel - 2014-04-26 12:32

      In UK the average smoker can actually afford a pack of smokes legally. They earn Pounds, not Rands that are becoming worth less than what the Zim dollar used to be!

  • Bravo Ntaliyane - 2014-04-27 04:20

    Illegal cigaretes in sa government lost about R18 billion in Taxes & Revenue per annum.

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