These losses of regulating tobacco have amounted to millions of rand on an annual basis, and all the ministers of finance reported these losses to the government on a regular basis says the letter writer.
These losses of regulating tobacco have amounted to millions of rand on an annual basis, and all the ministers of finance reported these losses to the government on a regular basis says the letter writer.

LETTER: Stubbing out the economy, ANC style

By Arnold Verster Time of article published May 28, 2020

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OPINION  - I cannot get clarity on why the tobacco ban should be extended.

With regard to the further extension on cigarette sales - for decades now, the country has been aware that the illegal import and sale of cigarettes in South Africa was causing a big loss of income to the country, as no tax was collected.

These losses amount to millions of rand on an annual basis, and all the ministers of finance reported these losses to government on a regular basis.

These smugglers, however, had to compete with the legal market - forcing them to keep their prices and volumes down to meet the demand for their products in the illegal market.

Things changed drastically with the ban on the sale of cigarettes on the legal market and competition was removed from the market, creating a monopoly where illegal traders rule.

With smokers now getting their products from the illegal market, the increase in illegal sales amounts to billions of rand on a monthly basis.

We cannot afford to lose more money due to seemingly irrational decisions and/or other agendas.

Mr President, I am only an accountant with a good understanding of economics but very little understanding of politics.

Please help me to understand this one.

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