Sars Inquiry into Illicit Trade welcomed by Philip Morris SA
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JOHANNESBURG - Tobacco company, Philip Morris South Africa (PMSA), has welcomed Minister Tito Mboweni’s March 2020 deadline for a major South African Revenue Services (SARS) study into the size of the illicit economy.
This was the message today from PMSA’s Managing Director, Marcelo Nico, following the International Law Enforcement IP Crimes Conference in Century City, Cape Town.
Nico said, “We welcome Minister Mboweni’s commitment in Parliament. The findings of the SARS research into the illicit economy will help to strengthen cooperation between the state, private sector and civil society. PMSA fully supports all efforts to combat illicit trade.”
The illicit cigarette trade alone has cost South Africa over R40 billion in tax revenue since 2010, according to the Tobacco Institute of Southern Africa (TISA). In total, SA reportedly loses R1-trillion a year, or 20% of GDP, to the illicit economy. These proceeds are generally used to fund drug smuggling, human trafficking and other serious crimes.
Nico said, “The next important step is for South Africa to ratify the Protocol to Eliminate Illicit Trade in Tobacco Products (ITP). Our country suffers from one of the highest rates of illicit tobacco trade globally. We look forward to government urgently submitting this international treaty to parliament to ratify. This will add further momentum to our joint efforts.”
FILE - In this Dec. 20, 2018, file photo Juul products are displayed at a smoke shop in New York. Philip Morris South Africa has welcomed Minister Tito Mboweni’s March 2020 deadline for a major Sars study into the size of the illicit economy. (AP Photo/Seth Wenig, File)
Beyond lost tax revenue, illicit cigarettes undermine South Africa’s public health agenda, as products may not comply with regulatory requirements.
For example, exceeding the maximum tar and nicotine levels, and non-compliance with Reduced Ignition Propensity regulations.
Illicit cigarettes are also more affordable and accessible to minors.
“We have a social responsibility to take action. As a tobacco company, we are walking the talk by moving away from selling cigarettes, with smoke-free alternatives now constituting 60% of our commercial activity. Our ultimate vision is for a smoke-free South Africa and world,” Nico said.
Nico called on the public not to support the illicit cigarette trade in any way. “We are further encouraging smokers to quit as the best choice, and if they don’t quit, to change to a science-backed, smoke-free alternative.”
Philip Morris International (PMI) has launched a US$ 100 million global initiative to tackle illegal trade and related crimes, such as corruption, money laundering, and organized crime. A wide range of public, private and NGO projects are funded by this initiative.
To protect its operations from crime, and to ensure compliance with the law, PMI is using advanced track and trace technology, security features and world-leading supply chain controls.
FILE PHOTO: A woman tries Philip Morris' IQOS 3 MULTI device after its launching event in Tokyo
BUSINESS REPORT ONLINE