News24

R4bn lost to illegal cigarette traders

2012-03-22 19:00

Johannesburg - About 700 000 contraband cigarettes were seized across the country in March, the Tobacco Institute of SA (Tisa) said on Thursday.

"Illegal traders are costing the country as much as R4bn in excise duties and VAT not paid," Tisa chief executive officer Francois van der Merwe said.

"It is also crippling the legal tobacco industry as the illegal cigarettes are mostly sold at prices that do not even cover the taxes."

Because of this, the industry's volumes had declined by more than 30% in the past 10 years, he said. This had resulted in the closure of factories and job losses.

On March 6, the SA Revenue Service seized over 100 000 contraband cigarettes in Mitchells Plain, Cape Town, said Van der Merwe.

The following day 140 000 illegal cigarettes were confiscated from another reseller in Cape Town.

Police seized 250 000 contraband cigarettes in Durban, and on March 8 and 9 over 170 000 cigarettes were confiscated in eastern Gauteng.

Van der Merwe said people buying these cigarettes were supporting crime.

"This is money that could be spent on education, poverty alleviation as well as much-needed infrastructure development. Consumers looking to save money by purchasing cheaper and often illicit cigarettes are unwittingly supporting crime.

Comments
  • Chad - 2012-03-22 19:17

    Yeah, Mr. Pravin Gordhan. Did you and your predecessor, (E-)Manuel honestly thought that raising sintax every year discourages smoking and drinking? The reality is, you and your government are just fueling the trade for illegal substances. This is quite a laughing matter.

      Robert - 2012-03-22 19:50

      Compaired to R 30 bn that no one knows about.

      Kevin - 2012-03-23 06:19

      And for every contraband cigarette in SA the anc cadres corrupted ,frauded and stole a 1000 times more.

  • Gregory - 2012-03-22 19:21

    I doesn't cover the taxes you and you cronies steal and plunder. What a shame you will have to cut down on your blue label whiskey . While I smoke my illegal ciggerettes.

  • rowan.maulson - 2012-03-22 19:22

    Nope.. its not illegal cigarettes that are causing the lost money.. numbnuts. Its the sintax that you keep bloody increasing every year.

      Gregory - 2012-03-22 19:33

      I am aware of many unemployed individuals making a living and feeding their children from the sale of illegal cigarettes.

  • Rob - 2012-03-22 19:33

    South African's are smoking far too many cigarettes.

      bernpm - 2012-03-22 21:17

      not the issue here!

  • Sheik - 2012-03-22 19:40

    The ANC members have stolen 4 times more than that amount from the people last year.

  • Gideon - 2012-03-22 19:43

    Whatever, do I really care if Big Tobacco is hurt by illegal cigarettes? Especially after their super self-rightious "Illegal Cigarettes promote crime" campaign. Sod off!

      bernpm - 2012-03-22 21:22

      In a so-called free market system, the lowest price for the same quality (or a little less) gets the business. Sin taxes do distort the market mechanisms and call for other market entrants. The US created the Maffia when alcohol was "verboten". Illegal alcohol producers are on the rise, still in closed communities but another few sin tax rounds and it will become a profitable undertaking.

  • Hugh - 2012-03-22 19:47

    gee I am in tears over this. Government was warned that people would support contraband cigarettes becuase of the taxes. As A non smoker no way will I report someone who deal in illegal smokes. They have just the same right to do as they please with their bodies as I. As for 2nd hand smoke. I suffer more stuck next to a diesel smoke bleching bus or truck for 20 minutes almost ever day in a traffic jam.

  • harley1 - 2012-03-22 19:49

    GOOD YOU TAX R11.00 PER 20 SMOKES I DONT SMOKE BUT I AM GLAD THAT YOU ARE ALL GETTING F....D AND THE GUYS THAT SMOKE CAN AFFORD IT GOOD ON ALL YOU SMUGGLERS THE GOVERMENT HATES OPPOSITION AND ALL THE MONOPOLY MANUFACTURERS ARE GETTING IT WERE IT HURTS BEST !!

  • MichaelPayne - 2012-03-22 20:01

    Seriously, screw these pigs. I'l happily pay R10,50 a pack. If you want to just keep upping the tax every year do you really think Im gonna feel bad? Supporting crime? Oh please

      Gregory - 2012-03-22 20:14

      Yeah, screw the pigs, I pay R7.50 a pack of 20.

      Stormkaap - 2012-03-22 20:55

      Agree with you, who cares if BAT or any of the other manufacturers lose money. If you can get it cheaper so be it! Thank goodness I dont smoke..or drink

  • Steve - 2012-03-22 20:35

    The government supports crime why cant we, ffs we pay enough tax

      Gregory - 2012-03-22 23:05

      Right. Even if we just getting a tiny piece of pie it's better F...all.

  • Jacqui - 2012-03-22 22:08

    Maybe there is something wrong with my mathematical ability, but R5714.29 sin tax per cigarette..... Then again, we could look at it as the 4bn is only 30% on what they think is out there....again I get to around 54 million packets of contraband cigarettes sold per month. Only about 47 million people in the country...

  • Diaan - 2012-03-22 22:08

    "Illegal traders are costing the country as much as R4bn in excise duties and VAT not paid," No IT does not It is depriving corrupt Zuma and his cronies of R4bn that would have just been used to maintain Zuma's 9 cows in luxury Havent payed more than R10 a packet the last three years AND IM LOVING IT !!!!!

      Tony Lapson - 2012-03-23 09:25

      Careful guy, you can be traced from your comments if they so choose.

  • jtkuther - 2012-03-22 22:28

    "This is money that could be spent on education, poverty alleviation as well as much-needed infrastructure development". PLEASE, our government must really think the electorate are idiots . . . .I get so worked up when I read drivel like that . . . . Tossers.

  • Ashen - 2012-03-23 06:56

    Ah shame, government is sad they lost out on R4bn, not that it could be used for the betterment of the country, but to satisfy their own greed. Bstards!

  • Ashen - 2012-03-23 07:01

    Funny that the following is said "Consumers looking to save money by purchasing cheaper and often illicit cigarettes are unwittingly supporting crime." We still support crime everyday anyway, how? the government steal and squander our taxes, that's how! and why do they use this same excuse all the time "This is money that could be spent on education, poverty alleviation as well as much-needed infrastructure development." Thank you for using existing taxes for the above mentioned issues...NOT! bunch of grinches! The grinches who stole/steal SA's taxes!

  • jenni.parker3 - 2012-03-23 07:12

    Well,Well, well - after trying on numerous occasions to make contact with Gold Leaf Tobacco Corporation and Gwaai - sole distributors of Voyager cigarettes on faulty packaging and boxes only containing 17 instead of 20 cigarettes, to no avail, Not even a reply to all the e-mails I have sent, I think my next move is to find an illegal outlet and at half the price as well Marily Mulder, Krugersdorp

  • Marion - 2012-03-23 07:25

    The sintax has not stopped me from smoking. It has resulted in me buying the legal cheaper brands, like Aspen, though.

      Marion - 2012-03-23 07:29

      ... and selling 'loose' cigarettes is 100% illegal but I'm sure that all of us who smoke have, at one time or another, paid for loose cigarettes.

  • Murechen - 2012-03-23 07:55

    I pay R35 for a box of twenty. The quality of the smokes are sometimes questionable, and I've started to think that the retailers are buying illegal cigarettes and making a massive profit or the manufactures are dropping thier quality standards. Maybe they should look into that before trying to guilt people by talking about hospitals and schools that could have been built. Quality products at affordable prices will have people buying legal cigarettes again.

  • Tony Lapson - 2012-03-23 09:20

    What a load of rubbish. The way they use the word "crippling" when it only means that they aren't getting as big of a salary. Seriously the money would never have gone to schools and hospitals. It is the same thing with them constantly implementing more and more taxes and raising rates. The government is run like a bad, profit based business, with no concept of the future and it's executives being all too willing to dip their hands into anything that they can benefit from.

  • ludlowdj - 2012-03-23 10:04

    As long as sin tax is used to inflate ANC pockets there will be a healthy trade in illegal cigarettes and alcohol and anything else that can be brought across the border at a cheaper cost than it is available locally. The government has set itself up as the enemy of the people and must accept that where ever possible people will cut corners and resort to illegal trade to maintain their own lifestyles, AND RIGHTLY SO. I personally will buy whatever I can at a cheaper price when ever possible, the government says its illegal, I call it a free trade system.

  • Gerhardus - 2012-03-24 22:36

    Big Far Lie! Interesting that Restaurant owners still keep smoking sections... The profit stays with the smokers. nuff said.

  • gavin.lombard3 - 2012-04-24 10:36

    GAVIN JUST TO LET YOU ALL KNOW THAT THE THREE MAJOR CIGARETTE MANUFACTURES MAKE EVEN MORE THAN THE TAX MAN.THE COST OF MANUFACTURING IS AROUND R1.00 PER 20 +TAX R11.76 INCL VAT WHICH =R12.76.WHOLESALE TO THE RETAILERS ON MAJOR BRANDS IS AROUND R26.50,A VERY HEALTHY MARGIN.THESE MAJOR CORPORATIONS HAVE BEEN FINED INTERNATIONALLY FOR TAX EVASION AND SMUGGLING,JUST GOOGLE THEM AND SEE.SARS DOES NOT EVEN AUDIT THESE COMPANIES AS THEY DONOT HAVE TEAMS BIG ENOUGH OR QUALIFIED TO DO THE JOB AND IT WOULD BE FAR TO COSTLY TO USE AN OUTSIDE AUDITING FIRM.THIS GIVES THESE COMPANIES CARTE BLANCH AS TO WHAT THEY DECLARE IN MANUFACTURING.

  • debbiewiblin - 2012-07-12 22:25

    OH come on...who the hell do u think believes u that the money for legal cigarettes will be spent wisely on education (sickest joke)...is that woman fired yet that didnt get books to the students????....Poverty!!!! Ive not seen a poor person get anything from the government...THIS IS SUCH A JOKE...

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