Tax Justice SA outlines 5-point plan to stub out illicit cigarette trade

Tax Justice South Africa (TJSA) has outlined a five-point plan to address the country’s illicit cigarette trade.

TJSA said the plan came after its investigation which blew the lid on how the trade of illicit cigarettes had “taken over South Africa’s mainstream market”, resulting in “criminals looting billions of rands needed to save lives and rebuild our nation”.

The investigation revealed that shops throughout the country were selling cigarettes that evade due taxes.

TJSA’s five-point action plan

1. Arrest, prosecute and seize the assets of criminals heading the production and distribution of illicit cigarettes.

2. Enforce stricter controls at our borders, place a permanent South African Revenue Service (Sars) official at every cigarette factory and introduce track-and-trace technology.

3. Shut down any plant making cigarettes found being sold at prices below the minimum collectible tax (MCT).

4. Impose a minimum price for tobacco products at 30% above MCT, below which these products are identified as illegal and immediately seized.
5. Introduce an education programme for retailers, paid for by tobacco excise taxes, to help them identify which brands are illicit and cannot be sold.

The founder of TJSA, Yusuf Abramjee, said: “The annual R8 billion being lost in unpaid ‘sin’ taxes would pay to vaccinate half of all South Africans against Covid-19. Instead of turning a blind eye, authorities must act now to save lives.”

Meanwhile, Fair-trade Independent Tobacco Association (FITA) has distanced itself from TJSA and slammed its investigation.

READ MORE: FITA slams Tax Justice SA’s ‘concocted findings’ in illicit cigarette trade probe

Compiled by Makhosandile Zulu

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