South Africa’s cigarette trade has been “captured by criminal syndicates,” with three-fourths of all cigarettes now sold coming from illicit sources, the South African Revenue Service (SARS) said this week. Speaking to Parliament’s health committee on October 22, SARS Commissioner Edward Kieswetter said the illegal trade has drained billions in tax revenue and poses a growing threat to the economy. Research from the University of Cape Town, Ipsos, and Tax Justice SA shows the illicit tobacco market has ballooned from 19% in 2014 to 75% in 2025, costing the state roughly R84 billion ($4.9 billion) in excise losses between 2020 and 2022.
Kieswetter described the trade as “industrial-scale criminality,” involving money laundering through gold refineries, property schemes, and offshore investments. He linked the rise of illicit tobacco to weakened enforcement between 2014 and 2018, during the Zuma era, which saw oversight dismantled and revenue stagnate despite steady consumption.
The South African Police Service (SAPS) confirmed that the illicit cigarette trade has become a “national priority threat” linked to organized crime, saying the trade now operates through five-tiered syndicates spanning financiers, smugglers, and distributors connected to drug trafficking and human smuggling networks. Most contraband enters through Zimbabwe, Mozambique, and Botswana, it said.
