Tobacco giant drops legal action against government
According to BASA, the illicit trade of tobacco continues while a R285 billion shortfall in tax revenues looms.
AS the government ban on tobacco sales continues into level four lockdown, British American Tobacco South Africa (BATSA) announced they will not pursue legal action, but continue discussions with government on the formulation and application of the regulations.
This after BASA received a formal response to a letter they sent to Ministers in the National Command Council on 30 April.
“We are convinced that by working together we can find a better solution that works for all South Africans and removes the threat of criminal sanction from 11 million tobacco consumers in the country,” said BASA in a statement.
According to BASA, there has been a significant rise in the illicit trade of tobacco during the lockdown, while R285 billion shortfall in tax revenues looms.
Also read: Cigarette ban decision not taken lightly, President Ramaphosa
“We urge government to consider an approach that will address their concerns while also ensuring legitimate businesses can contribute to this country’s economy and future growth. The illicit traders are the only beneficiaries of the ban on tobacco sales,” read the statement.
BATSA claimed that illegal cigarette sales have continued across the country during level five of the risk adjusted approach while the country has lost R36 million every day in taxes.
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“While BATSA supports the government in its mission to prevent the further spread of the virus, we believe it is vital that there is a renewed and stronger effort under level four to permanently close down the illegal supply lines of tobacco that have been established over the past number of weeks. Reopening the legal, taxed and regulated tobacco market must be part of the solution,” read the statement.
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