The Tobacco Institute of Southern Africa (TISA) has said that the South African government ‘loses’ more than ZAR4 billion ($277 million) in revenue annually to the illegal tobacco trade, and that the proceeds from that trade might be funding organized crime, according to an Anadolu Agency story.
But the story said only that – unnamed and unspecified – security experts had raised ‘concerns’ that revenue from the illegal cigarette trade was funding organized crime.
Otherwise, it quoted Francois van der Merwe, the CEO of TISA, as saying in an interview on Monday that the illegal trade was a big threat to the sustainability of the legal industry and government revenue.
“The money lost to illicit trade could have been used by government to fund education, health and other programs,” he added.
Van der Merwe said South Africa had the highest level of illegal tobacco trade in the region and was listed amongst the top five markets for illicit products in the world.
According to the TISA, as of September 2015 an estimated 23 percent of all cigarettes consumed in South Africa were illicit (equal to more than four billion sticks).
And whereas previously most illicit cigarettes were smuggled in from China, Dubai, and neighboring countries, some of the illicit cigarettes were now being manufactured in South Africa.
Van der Merwe said it was important for the government to increase its fight against the illegal trade because the practice eroded investor confidence.
He said that the illegal trade made cigarettes available and affordable to young people and the financially poor; and it helped to increase the level of smoking, undermining Department of Health goals.