After 118 days of lockdown, the ban on tobacco products sales has now cost over R4 billion in excise taxes alone and substantial job losses.
British American Tobacco South Africa says it fully supports the unequivocal recommendation from the Research Unit on the Economics of Excisable Products report’s authors for an immediate lifting of the tobacco products ban.
The research also proves that there has been a huge increase of 430% in the number of people sharing cigarettes, and potentially exposing themselves to Covid-19, as a result of the now almost four-month prohibition on the legal sale of tobacco and vaping products. A post-ban hike in excise tax will “permanently” hand the majority of the cigarette market to criminals who do not contribute to this country’s fiscus.
“These illicit suppliers are not, suddenly, going to become compliant and start obeying the law and paying taxes when the ban is, eventually, lifted. They evaded taxes prior to the lockdown, they’ve made billions tax-free during the ban and they will evade taxes after the ban.” “If the country is to capture any of the taxes it so desperately needs, then Sars needs to be allocated the required resources to establish a nationwide task force. It is uneconomic to retail a pack of cigarettes at less than R25, if taxes are being paid. Anything selling below that number should be considered ‘suspicious’ and investigated,” said Moloto.
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