2 June 2021 - As predicted, the five-month prohibition on legal tobacco sales was a boon for the illicit industry. They have kept many of their new-found customers, judging by the complaints of legal retailers.
During South Africa’s strictest national lockdown, a ban on alcohol and tobacco fanned the fires of a large and lucrative black market for cigarettes. The South African National Treasury data show the government lost R9.5bn in alcohol and tobacco taxes in the first four months of the 2020 fiscal year. A report funded by the country’s Tobacco Institute showed that two years before the ban, the country already had one of the world’s largest illicit markets for tobacco products. In December last year, a SARS official and two accomplices were charged with corruption and defeating the course of justice over a seized truck and contraband, which was allegedly cleared to pass over the Beitbridge border crossing from Zimbabwe. The contents of that truck were estimated to be worth R10m. On Sunday, more Remington Gold cigarettes were seized, this time the load was worth R13m. Tax Justice SA founder Yusuf Abramjee says the bust is proof of the findings released in a report by Ipsos, which
Simnikiwe Hlatshaneni British American Tobacco South Africa has denied using its report to divert attention from the OCCRP report, contending that the allegations in that report are being dealt with. Picture: iStock Smaller tobacco companies are at loggerheads with cigarette giant British American Tobacco South Africa (BATSA), with both parties accusing each other of anti-competitive behaviour. This follows the release of two reports into the tobacco trade, one compiled by data company Ipsos and another by the Organised Crime and Corruption Reporting Project (OCCRP). The latter detailed damning findings on smuggling and organised crime attributed to a number of multinational cigarette manufacturers in West Africa, particularly British American Tobacco (BAT) through its South African subsidiary, BATSA. The Ipsos r
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Nearly three-quarters of retail outlets in Free State, Gauteng and Western Cape are selling illicit cigarettes: Ipsos. 11:18
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Image: Suzanne Plunkett, Bloomberg News
A study commissioned by British American Tobacco SA (BAT) â said to be free of interference from BAT â suggests the cigarette market has been given over to black marketeers, with four out of five outlets surveyed in the Free State offering smokes at below the minimum collectible tax (MCT) of R21.61 for a pack of 20.
Any pack of 20 cigarettes selling below the MCT of R21.61 is deemed to be illicit. Some packs were selling for as little as R10 and even R6 â meaning no tax could have been paid on these cigarettes.