Illicit cigarettes cost govt R4bn per year

2015-11-10 16:30
(AP)

(AP)

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Cape Town - If you paid less than R18 for your packet of cigarettes, it is more than likely that your smokes are contributing to the R4bn in revenue government loses annually.

South Africa is one of the top five illicit tobacco trade markets in the world, it was announced at the Tobacco Institute of Southern Africa’s (Tisa) anti-illicit trade conference in Cape Town on Tuesday.

Tisa CEO Francois van der Merwe explained that while on average 10% to 12% of tobacco products consumed in the world were illegal, in SA this figure was 23%.

"About 700 000 illegal packets of 20 are smoked every day," he said.

"Since 2010, out government has lost well over R24bn to illicit trade. This is R10m per day."

A total of R12.42 of every packet of cigarettes goes to government in excise duties alone.

"It’s a highly taxed product and a big contributor to our fiscus," he explained.

Most illicit cigarettes could be purchased for under R12 a packet, impacting the country’s health agenda as it made it more easily affordable and was also cheap enough for children to purchase.

Buying what you think is a bargain directly finances organised crime, Van der Merwe warned.

"Do not think the person who sells you the cheap cigarettes is the illicit trader. Behind them are huge, highly organised criminal syndicates and kingpins.

"Cigarettes are a highly sellable product with a high value. The criminals make millions in profits."

Deputy Police Minister Maggie Sotyu said an integrated effort was needed to combat the illicit tobacco trade.

"South Africa is a manufacturing hub, a point of distribution and a nexus point for smuggling into and from our neighbouring countries," she said. Stronger border control will be essential in combating this.

According to Tisa, SA had a problem with counterfeit cigarettes, but the majority of the illicit cigarette problem was concentrated in goods where duties had not been paid or where there was non-compliance with the Tobacco Products Control Act.

Read more on:    cape town  |  crime

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