TOBACCO INDUSTRY
Half of cigarette sales are illegal, says BAT
The tobacco industry continues to face rising number of challenges in SA including rising levels of trafficking and an increasingly uncertain regulatory environment. British American Tobacco (BAT) SA estimates that 47% of the tobacco market in the country is controlled by illicit players, making it one of the largest in the world and costing the fiscus up to R9bn a year in uncollected tax as production volumes are concealed from the authorities. Tobacco "yields are improving, but we face an even greater threat in the form of the illicit trade, which robs the legal industry of income and puts all the jobs and livelihoods in the tobacco value chain at risk", said Rudolf Otterman, chairman of Limpopo Tobacco Processors. Globally, the illegal tobacco industry accounts for about 6% to 12% of consumption. Illegal products are said to be far cheaper than legal cigarettes, taxed at a minimum of R16.30 per packet of 20, which illicit producers do not pay. This, according to the tobacco indus...
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