Illicit cigarette traders have cashed in on the weakened SA Revenue Services (Sars) in the past two years, with the revenue
collector set to lose R7 billion in tax revenue this year, the Tobacco Institute of Southern Africa (Tisa) said on Thursday.
Research by Ipsos, commissioned by Tisa, showed that most cigarettes in the market are sold at below R17.85c per pack, a minimum amount taxed by Sars.
Any manufacturer of such products is in fact evading paying tax, said Tisa’s Francois van der Merwe.
‘’The market is flooded with cheap cigarettes, affordable and available to children and the vulnerable, and a threat to jobs in the tobacco industry. At least 8 billion in cigarette sticks, referred to as loose cigarettes sold at 50c each are illicit.
“For only this year, R7 billion will be lost to Sars, which is 14% of the R54 billion Sars collection shortfall,’’ said Van der Merwe.