JOHANNESBURG – The recently launched Black Tobacco Farmers Association (BTFA) on Monday called for the government to keep excise taxes at their current level as finance minister Tito Mboweni will table his maiden Budget this week.
BTFA said their call to action was inspired by the SA Revenue Service's (Sars) incapacity to effectively tackle the illicit trade of cigarettes in order to protect farmers from the threat of job losses.
South Africa's top independent economists have found that revenue collections from taxes on cigarettes have declined sharply in spite of successive rate hikes.
Research house Ipsos reported in November 2018 that Sars was now losing at least R8 billion annually due to illicit cigarettes. Econometrix found that income from tobacco excise declined by R1.94 billion between 2015/16 and 2017/18.
Ntando Sibisi, the BTFA chairperson, said illicit trade, as well as an impending threat to increase excise taxes, posed a risk to the entire tobacco value chain, especially emerging farmer programmes that have developed small scale tobacco farmers.