South Africa has an illicit cigarettes trade problem. The tobacco industry has always used the threat of illicit trade as the rationale to request government not to increase excise taxes and more recently, even suggested to the standing committee on finance to freeze excise tax for three years which was rejected. The Tobacco industry is using many tactics to delay any legislation being passed while they fuel the illicit trade market to make profit. In other words, they are involved in what is called the ‘third shifts’, that is, background conduct of illicit business under front of legal business.
Professor Lekan Ayo- Yusuf of the Africa Centre for Tobacco Industry Monitoring and Policy Research (ATIM) has highlighted that the current tobacco ban has also amplified and exposed the already existing underhand activities of the industry. He also highlights in an article published by the Mail and Guardian that the “decision of the government to allow the industry to resume production of cigarettes in May, supposedly for export only, fuelled the illicit trade as these cigarettes might have either not eventually been exported or were exported only to return to the country (round-tripping).”
There is need for political will to deal with the problem of Illicit trade and the SARS plan to deal with illicit tobacco needs to be expedited.
The full Mail and Guardian article can be accessed HERE.