Illicit cigarettes: the evil burning down SA’s economy
The boom in the illicit cigarette trade coincides with skulduggery at the country’s revenue service, Sars, under former tax commissioner Tom Moyane, who was recently fired at the recommendation of the Nugent inquiry. How is it that a parallel illicit business operates quite openly; has it led to the huge slump in tobacco excise revenue; and why are the newcomers and established players like BAT at each other’s throats?
If you were looking for the best concrete example of how SA has slipped off the tracks over the past decade, it would be difficult to beat the mesmerising, twisting, grotesque story of the country’s tobacco wars. The tobacco industry’s recent history has everything: high politics and low skulduggery; ideological battles and press manipulation; well-intentioned state intervention that has ended up a disaster; and a fierce internecine battle between factions of the industry. And, of course, spies. The only thing it does not have is Guptas. It’s an important morality tale too: a functioning system suddenly turns into a huge train smash, dragging good people through the mud and providing bad actors with free rein. All this comes, of course, amid a high-stakes battle for companies like British American Tobacco (BAT), which has lost 41% of its share price so far this year on the JSE, as the market has come under siege from new rules. Investors are running for the hills, as they might. "Th...