R12bn Haemorrhage: What illegal cigarettes cost SA

Illegal Cigarretes
Image Credit – SABC (South African Broadcasting Corporation)

THE cornerstone of the government of the new South Africa is its transformation and development agenda, aimed at improving the lives of historically disadvantaged or underprivileged sectors of society so as to achieve equity, mainly through affirmative action.

The crux of the matter is to try and reverse tragedies of the past and put efforts to create a new society – a picture of what might have been had South Africa been an equal society pre-1994.

This government’s 10 point strategic agenda prioritises speeding up growth and transforming the economy to create decent work and sustainable livelihoods.

It is this government’s strategic priority to embark on a massive programme to build economic and social infrastructure and also to embark on a comprehensive rural development strategy linked to land, agrarian reform and food security.

But, it is unfortunate that whilst a lot of progress has been achieved in the past decade regarding these strategic areas, there continues to be various sore points which derail progress and literally throw development into disarray.

One of the major problems threatening the ‘Great South African Dream’ is the proliferation of illegal cigarettes into the country. That’s the equivalent of the cost of more than 70,000 new policemen or 90,000 new homes.

That is transformation down the drain and unless all sectors of the country unite to stem the tide, this country will soon be on its knees. The quest to foster a society that parades equality and a dispensation that screams improved prospects for everyone will remain a pipe dream.

British American Tobacco (South Africa) reports decries that the country loses to the tune of R5 billion in lost taxes and unpaid excise. “But the price you could pay when smuggled cigarettes bring crime into your neighbourhood may be far, far higher!

Due to its very nature, it is difficult to quantify the illegal tobacco trade. The South African tobacco industry currently estimates that illicit trade in tobacco products, represents a growing 20% of the total market share: that’s one in every five cigarettes that are bought,” a statement from BAT(SA) reflects.

The New Age, not long ago carried a story on illegal cigarette trade where a couple and a customs official appeared at the Alexandra Magistrate’s Court on over 200 charges relating to an organised crime syndicate, which has become a serious headache, not just in South Africa , but globally.

Francois van der Merwe, Chief Executive of Tobacco Institute of South Africa (TISA) painted a very gloomy picture of the situation on the ground when he observed that more than a third of sales of cigarettes were illegal, are smuggled through our borders and find themselves (untaxed) in consumer shelves.

“Over the last three years, illicit trading has cost the country R12 billion, which could have been used to build hospitals or schools,” van der Merwe said decrying the sad state of affairs.

The SAPS and other crime fighting agencies have their hands full against smugglers of illegal cigarettes. Just last week, Klerksdorp K9 seized 10 boxes of counterfeit cigarettes with an estimated street value of R24.000.

This incident occurred on Wednesday, 30 January 2013 at about 12:00, whereby a 34-year-old Pakistan National was also arrested, according to the SAPS Online Journal.

This is just the tip of the iceberg. And until we unite to catch the big fish and the small ones too, we will all drown in all sorts of misery.

The good way to start is to do away with weak criminal penalties and strengthen border controls and corruption. Effective controls, effective laws, but all in all – the correct attitude!

Written by: Musa Ndlangamandla – Transform SA Ad Sales/Editorial Executive.

Musa is a senior journalist from Swaziland and until January 2012 he was Chief Editor of The Swazi Observer Group of Newspapers. He is a former advisor and speech writer to King Mswati III. Musa studied Law and holds a number of certificates from leading schools of Journalism. He has travelled to over 35 countries on assignment. He also writes as a freelancer for various leading publications.



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