The proposed introduction of “extreme tobacco legislation” could “acutely exacerbate” the already high illicit trade, which currently accounts for at least one quarter of the market, warns the Tobacco Institute of Southern Africa (Tisa).
“While the illicit trade in tobacco places 8 000 to 10 000 jobs at risk on farms alone, the financial cost to the fiscus is conservatively estimated to be at least R5 billion a year.
This figure accounts for 10% of the estimated national budget shortfall of some R50 billion,” said Tisa chairperson Francois van der Merwe.
Furthermore, Tisa estimates that since 2010 the government has lost well over R27 billion in unpaid taxes (excise duty and VAT on excise) due to illicit tobacco trading.
The proposed legislative changes include a ban on the display of tobacco products in all formal and informal retail and wholesale outlets and the introduction of plain or standardised packaging for tobacco products.
There's also been a call for the regulation of electronic cigarettes and other similar products in the same way as traditional tobacco products.
