SATTA Urges Action Against Illicit Trade

The South African Tobacco Transformation Alliance (SATTA) has called for stronger action against the smuggle, manufacture and sales illicit products.

Last year, South Africans smoked 37 billion cigarettes, but the South African Revenue Service (SARS) taxed only 13 billion. “Illicit tobacco is “the biggest fight we face now,” said Edward Kieswetter, SARS commissioner.

“Government should allocate more resources to Sars to pursue these complex crimes,” said SATTA spokesperson Zachariah Motsumi in a statement. “As the commissioner pointed out, illicit tobacco products account for 60 percent to 70 percent of cigarette sales and causes tremendous damage to the fiscus.”

The national fiscus is not the only area affected by the illicit trade. “Cigarette producers like BATSA has to retrench tobacco factory workers and about 500 jobs are currently at risk in third-party logistics companies that transport their products,” said Motsumi. BATSA has already cut 584 jobs due to a 40 percent decrease in [legal] cigarette sales from 2020.

“People are not smoking less—it is the sale of legal cigarettes that decreased,” said Motsumi. “The net effect of this is twofold: It has devastated tax collection and decimated the legal tobacco sector.”