British American Tobacco South Africa (BATSA) declared today that the entire domestic cigarette market is now controlled by illicit suppliers. BATSA added that the nation’s lockdown of legal cigarette sales during the Covid-19 pandemic has cost the country ZAR4 billion ($241.7 million) in lost excise tax revenues and 30,000 industry jobs lost.
“With an already overstretched consumer, further increasing the cost of tobacco products will simply mean they default to the illicit market, which is now significantly cash-flush and can now afford to significantly reduce their prices,” said BATSA spokesperson Johnny Moloto.
“This means that tax-compliant manufacturers like ourselves continue to be at a disadvantage while the state is losing around ZAR35 million [$2.1 million] every single day in excise taxes.”
Moloto added, “These illicit supply chains will be so entrenched that it will be difficult for SARS (South African Revenue Service] to be able to reverse this or deal with this within a short period of time.”