R7 for a pack cigarettes? Authorities losing fight against illegal cigarettes

If you are paying R7 for a pack of cigarettes, chances are that the cigarettes are illegal.

This comes after a new report revealed that authorities are losing the fight against the sale of illegal cigarettes in South Africa.

Criminals flood shops with illegal cigarettes

The report shows that criminals are flooding shops with the illegal cigarettes and robbing South Africa of billions in vital revenue.

Leading market researchers IPSOS said that the trade in tax-evading tobacco has exploded in the past year, despite the government’s lifting of the lockdown sales ban 18 months ago.

Tax Justice South Africa spokesperson Yusuf Abramjee said while President Cyril Ramaphosa has terminated the National State of Disaster, the impact of the lockdown of illegal cigarette sales ban is actually getting worse.

“This damning new IPSOS report shows that the illicit trade in cigarettes that was fuelled by the lockdown ban is now entrenched across the country and authorities appear unable or unwilling to tackle it. Four out of five shops in the Western Cape are now selling illicit cigarettes, which are also on open offer in the vast majority of stores in Free State and Gauteng.”

Abramjee said the South African Revenue Services (SARS) need to do more to win the war against illegal cigarettes.

“SARS might boast that it is winning the fight against tax cheats, but they are spectacularly losing the war against the brazen cigarette manufacturers who are growing even richer at the expense of honest, hard-working South Africans.”

“There are four times as many fuel station shops selling cigarettes than a year ago and a single pack can now be bought for as little as R7, even cheaper than in the last survey in October,” said Abramjee.

In their nationwide survey in March, IPSOS researchers found that the vast majority of stores in hotspot provinces – the Western Cape (79%), the Free State (74%) and Gauteng (69%) – sold cigarettes below the Minimum Collectible Tax (MCT) of R22.79, proving that the manufacturers could not have paid due taxes on these products.

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