CAPE TOWN – The Food and Allied Workers Union (Fawu) has noted, with disgust, the latest study by Ipsos Research Institute on the rise in illicit trade of cigarettes that is reported to cost the economy an estimated R8 billion loss in revenue.
It is said that the illicit sale of cigarettes had now increased to 42 percent of total market share with a reported four out of every 10 of these estimated to be an illicit deal.
The research suggested that a particular brand of counterfeit cigarettes – “RG” – was trading at a mere R10 and was now one of the most popularly bought items. With a minimum tax of R 17.85 payable on every pack of cigarettes it was obvious that the manufacturer was not paying tax despite undertakings from the South African Revenue Service (Sars) to “crackdown” on illicit traders of tobacco.
Earlier this year, Fawu demanded that the National Treasury equip Sars in order to strengthen its abilities to investigate and prosecute those responsible for the manufacturing and sale of counterfeit goods.
Till this day, Fawu is still waiting on a response in terms of an action plan to act against illicit trade. It is therefore not surprising that illicit trade is booming in South Africa due to the poor ability of the responsible institutions to trace and prosecute culprits.