Agricultural industry lobby group Agri SA has called for urgent government intervention in the illicit tobacco trade in South Africa that reportedly saw up to R7 billion in excise tax revenue lost last year.
Responding to the findings of a report launched by the Tobacco Institute of South Africa (Tisa) last week – showing that 26.8% of cigarettes in South Africa were sold below the R17.85 minimum in tax payable – Agri SA CEO, Omri van Zyl, said that by drastically under-declaring their volumes and not paying the full tax, foreign producers had been able to flood the market with illegal goods.
South African tobacco farmers risked being cut out of the value chain if this trend continued, he added. “The implication of the findings extends beyond tobacco. If criminal organisations can earn billions each year through bypassing simple excise taxes, the next step is to infiltrate the value chains of other commodities,” Van Zyl pointed out.
