Illegal tobacco trade on the rise in SA

Image: iStock

Image: iStock

Much of the control over tobacco collapsed in tandem with the gutting of Sars by its former commissioner.

The tobacco industry is one of the most toxic on the planet: many people die prematurely every year because of the effects of cigarette, cigar and pipe smoking and many more have reduced quality of life.

For decades, the tobacco lobby spent billions of dollars around the world denying mounting medical evidence of the negative, often fatal, effects of smoking.

That the tobacco companies were able to keep reality at bay for so long was in part because of their successful advertising campaigns and by the fact that governments were reluctant to act against institutions bringing in tax money. And wherever there is money, there is an opportunity for corruption and dodgy dealing.

In South Africa, it is no different. In recent years, we have seen a battle by the local, supposedly legal, industry to mobilise public sentiment against the so-called pirate manufacturers.

These pirate manufacturers sell billions of cigarettes here annually, but evade paying government-mandated duties. These fake fags, so the claims go, are smuggled into the country from neighbours like Zimbabwe, or are made here in illegal, unmonitored factories.

At the same time, there has been a dirty war of allegations of bribery and spying. British American Tobacco South Africa (BAT SA) claims it pays R25 million a day in excise duties to the government.

But is also in dispute with the SA Revenue Service over R2.1 billion in tax and interest after its returns from 2006 to 2010 were reassessed.

BAT SA and other multinational tobacco companies have also been accused of avoiding tax in lower and middle income countries … allegations BAT SA has denied.

Much of the control over tobacco collapsed in tandem with the gutting of Sars by its former commissioner, Tom Moyane. The new Sars commissioner, Edward Kieswetter, will have his work cut out sorting out the mess.

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