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Last Updated: Sep 7th, 2007 - 17:47:29 |
Illegal cigarette trade booming in SA
Sep 7, 2007, 17:43
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The trade in illicit cigarettes costs the state at least R1,4-billion in lost taxes each year, the Business Day reported on Friday. The tobacco industry says such trade is on the rise and is a result of South Africa's strict anti-tobacco laws. Tobacco Institute of South Africa CEO Francois van der Merwe said on Thursday the trade in illegal cigarettes was "frightening" and was estimated to account for about 20 percent of the total local cigarette market. He said about 10 million illegal cigarettes were sold in South Africa every day, accounting for about 11 percent of total consumption, which is estimated at 90,4 million cigarettes a day or about 33 billion cigarettes a year. A decade ago, this trade was "almost non-existent". Van der Merwe said consumption of legal cigarettes had decreased 30 percent over the past decade. The increase in illegal trade was partly a result of high taxes, and partly owing to the regulation of the industry, which made the trade very lucrative, he said. However, national health department spokesperson Sibani Mngadi disputed that strict regulations were responsible for the increase in illegal cigarette sales, as other, less regulated sectors were also experiencing an influx of pirate goods. South African Revenue Service spokesperson Adrian Lackay said criminals exported cigarettes and reimported them through unofficial channels, or the export was faked, to avoid having to pay excise tax.
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