Illegal cigarettes in SA sell for less than the tax payable on a single pack
For every R1 profit that Tisa members lose to illegal cigarettes, the government loses R5 across all taxes
Over the past three years, we have seen a rapid and significant growth in the availability of cigarette brands selling below the tax owed to Sars. Tax alone on a packet of 20 is R17.85, yet cigarettes are sold all over the country for as little as R5 a pack. It doesn’t take a rocket scientist to see that the companies selling cigarettes for less than the minimum collectable tax of R17.85 are evading taxes. This growth in illegal cigarette trade has naturally impacted the legal trade. Tobacco companies that comply with the law and pay their taxes have seen sales decrease by more than 20%, and more than 1,000 direct jobs have been lost. In 2018, the Tobacco Institute of Southern Africa (Tisa), whose members are legal companies that declare all of their sales to Sars and pay their taxes, commissioned Ipsos to conduct research into the prevalence of cigarettes selling below the minimum tax owed of R17.85 a pack. In July, Ipsos published its report on the findings. In summary, cigarettes...
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