Cape Town - The cigarette industry has welcomed the announcement of the lifting of the ban on the sale of cigarettes that will come into effect on May 1, when Level 4 of the lockdown regulations kick in.
On Thursday, President Cyril Ramaphosa announced the phased re-opening of the South African economy, saying cigarette sales would be permitted when the lockdown was eased.
The selling of cigarettes was prohibited under the Level 5 lockdown regulations, as only essential goods were allowed to be sold.
Chairman of Fair-Trade Independent Tobacco Association (Fita) Sinenhlanhla Mnguni said they welcomed the announcement by Ramaphosa.
“We are of the view that this, together with the tax relief extended to cigarette manufacturers and other industries, announced by Minister Tito Mboweni yesterday, are steps in the right direction by government in mitigating the damaging effects of the lockdown period. These steps are in line with what Fita had proposed to government, throughout the current lockdown period,” Mnguni said.
Fita had claimed that the illicit cigarette trade was flourishing and estimated the loss on the taxes to R1.5billion a month, on excise alone, with the ban on the sale of cigarettes in place.
“Government’s actions vis-a-vis the tobacco industry, over the last few days, have also been to the satisfaction our members and we are now of the view that there is no longer a need to proceed with the legal steps we had initiated against government,” he said.
Tax Justice South Africa founder Yusuf Abramjee also welcomed the easing of the lockdown and the interventions aimed to return the country to full economic activity.
“The lifting of the ban on cigarette sales is particularly welcome, as this will immediately pour R35million into the fiscus every day,” Abramjee said.
He said Tax Justice South Africa encouraged the government and law enforcers to crack down on the illicit traders, who have exploited the lockdown restrictions to enrich themselves.
“These criminals have denied the state the funds it is due, and which are desperately needed, at this time of emergency.”
Abramjee said illicit trade was rife and urged that it be reported.
“Our country is losing millions of rands everyday because criminals are pocketing money,” he added.