Illicit tobacco trade 'booming since Sars disbanded its probing capacity'
Telita Snyckers, the author of 'Dirty Tobacco,' - an expose on the dark underbelly of the tobacco industry, presented a virtual address to the Cape Town Press Club on Wednesday.
CAPE TOWN - According to an expert, the growth of the illicit tobacco industry has been on the rise since the South African Revenue Service (Sars) pulled back their investigation capacity.
Telita Snyckers, the author of _Dirty Tobacco - _an expose on the dark underbelly of the tobacco industry, presented a virtual address to the Cape Town Press Club on Wednesday.
The country loses as much as R7 billion in tax each year due to this insidious black market.
Over the past few years, illegally trafficked cigarettes have become more profitable than cocaine, heroin or marijuana.
Snyckers said the illicit tobacco trade penetration rate in South Africa was 26% in 2013.
“Once Sars started really looking at illicit tobacco and making a concerted effort to clamp down on it, illicit trade penetration dropped to 14%.”
However, since 2018 when the Sars' investigative capacity was disbanded, illicit trade crept up to 35%.
Snyckers said listed and legitimate tobacco companies may even be smuggling their own product.
“As much as 98% of all illicit tobacco comes from legal manufacturers. As much as one-third of tobacco exports go missing. The reason that happens is very simple because tobacco supply chains aren't regulated.”
If these supposedly missing consignments are kept for the local market instead, they can be sold, tax-free and duty-free, giving the sellers a much bigger profit.