The embattled tobacco farmlands of Vaalwater and beyond have been in the spotlight in recent weeks.
This followed the unveiling of a new study which discovered that almost 8 billion cigarettes would be sold over the year 2018, which translated into a loss of upwards of R7 billion to the national fiscus.
The Tobacco Institute of Southern Africa (TISA) national chairperson, Francois van der Merwe, said in a statement the institute had commissioned the highly-respected Ipsos to conduct the impact of the illicit trade of fags on the broader economy.
The release of the report has attracted the attention of the mainstream media, with van der Merwe being interviewed both on TV and radio, and quoted at length in the mainstream daily and weekly press.
Speaking during a media tour of the Vaalwater tobacco farmlands in early February, Van der Merwe said the illicit trade in tobacco threatened more than 10 000 jobs nationwide.
A significant chunk of these jobs, he indicated, were opportunities in and around Vaalwater, where the tobacco cash crop was arguably the largest employer of both skilled and unskilled labour.
At the time of the Vaalwater farmlands tour, Van der Merwe indicated TISA wished to sensitise then incoming President Cyril Ramaphosa about the consequences of the continued flow of illegal cigarettes into the country.
“The shortfall of government’s income this year is estimated at R50 billion. The Ipsos research shows that almost 8-billion cigarettes this year will be sold illegally, which translates to a more than R7 billion loss to the fiscus, or 14% of the shortfall. This is an outrage considering the country’s public finances and the fragile economic recovery,” Van der Merwe observed.
He continued: “These are known manufacturers, licensed by SARS, and refusing to pay their taxes. The SARS could put an end to this within a month. As TISA, we are encouraged by the commitments made recently to Parliament by the SARS acting commissioner to take immediate steps to stop the illicit trade.”
Van der Merwe said TISA put forth as a short-term measure that SARS agents should be placed in all factories “immediately”, to ensure all production was declared and duties paid, “as was done before.”
“We stand ready to assist and cooperate with SARS to rid the country of illicit operators,” he said.
The Ipsos study found that illegal cigarettes costing as little as R5 per pack were available for sale, in no less than 100 000 shops across South Africa.
The TISA chairperson said the institute believed the Ipsos study was the most “robust scientific analysis” of the multi-billion-rand illegal cigarette market ever carried out in South Africa.
“It has been peer-reviewed and independently validated,” Van der Merwe said.
The study further fingered by name certain tobacco factories alleged to short-change the taxman.
— The BEAT
