A plunge in the excise revenue collected from tobacco products in the past two years suggests the industry has taken advantage of the diminished capacity of the South African Revenue Service to avoid paying tax, fuelling the growth of the illicit market, a senior researcher from the University of Cape Town said on Monday. Excise revenue from tobacco products slid from R13bn in the 2015-16 fiscal year to R12.1bn in 2016-17 and R10.9bn in 2017-18, a 16% drop over the period, an analysis of Treasury data by Corné van Walbeek, head of the Economics of Tobacco Control Project at UCT, showed. The excise tax per packet of cigarettes rose from R12.42 to R14.30 per packet from 2015-16 to 2017-18, which meant the total number of cigarette packets on which tax was paid fell 27%, from 1.05-billion to 763-million in 2017-18, it shows. "This is unprecedented. SARS has been weakened to such an extent that people are taking chances. I’m confident big industry has become more complicit in the illici...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00.