Billions in taxes go up in smoke due to smugglers

Paul Vecchiatto

SOUTH Africans will smoke eight billion smuggled cigarettes, an increase of 500 million cigarettes from last year, costing the government R12-billion in lost taxes this year, Tobacco Institute of Southern Africa (Tisa) chief executive Francois van der Merwe says.

Opening the Tisa conference on the illicit cigarette trade, Van der Merwe yesterday said smuggled cigarettes now accounted for about 30% of the total number smoked in the South African market.

“With 52% of the retail price of cigarettes being tax, it means South Africa has the highest tax rate in the Southern African Customs Union. Illicit products are always smuggled to the region with the highest tax rate, because that is the smugglers’ profit margin,” he said.

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