Tax Justice South Africa (TJSA) says every tobacco company in the country should submit to a comprehensive official investigation in the wake of a damning new report that shows South Africa is being swamped by the illicit cigarette.
A major study by market researchers Ipsos, released on Monday 08, March 2021, revealed that, in some provinces, three out of every four retail outlets are selling a pack of 20 cigarettes below the Minimum Collectible Tax Rate (MCT) of R20.01, set by law.
“This is nothing less than organised crime, which is robbing decent South Africans of billions of rands desperately needed to save lives and rebuild our shattered economy,” said TJSA founder Yusuf Abramjee.
“Instead of paying lip service to the rule of law, South Africa’s tobacco companies must face a full official audit to establish how illicit cigarettes bearing their name are able to flood the market.If any manufacturer fails to pass that test, their factories should be closed down and all their brands should be seized and removed from the market immediately.”
The Ipsos mystery shopper survey of retail outlets, ranging from spaza shops to supermarket chains, across the country, revealed that almost half (41%) of outlets nationwide sell cigarettes below Minimum Collectible Tax (MCT).
Abramjee said it’s obscene that Government has just announced cuts in spending on hospitals and social grants, while criminals are pocketing billions by dodging these taxes.