BAT’s head of legal affairs, Ronan Barry, puts things into perspective regarding job losses: “The problem is significant in terms of how readily available these illegal cigarettes are. Read the report . The sale of tobacco products has been banned by government for 'health reasons' across South Africa since the start of the lockdown at the end of March. It is now estimated that over 90% of all illegal cigarettes in South Africa are manufactured locally, in factories that are quite visible in some of our biggest metropoles. “Taxes of at least 17.85 rand have to be paid on every pack of cigarettes in South Africa. Therefore, Minimum Collectible Tax (MCT) is R20.01 per pack of 20 cigarettes. Selling of cigarettes was banned and is still banned in South Africa as the country battles with Coronavirus. In addition, the South African government is keen to adopt further control measures before the World Conference on Tobacco or Health to be held in South Africa in 2018. Enter the survey competition. For BAT SA, protecting consumers and our business from the illegal tobacco trade is imperative. thesouthafrican.com is a division of Blue Sky Publications Ltd. Reproduction without permission prohibited. South Africa: 18 It is illegal to sell or supply any tobacco product to a person under the age of 18. It’s easy: you can spot illegal cigarettes by their price. Illegal cigarettes are costing South Africa R7 billion a year Smokers, have a look and see if your cigarette brand is on the naughty list. The company is also known to have begun producing cigarettes from a factory in Pietermaritzburg. South Africa is three months into a ban on the sale of cigarettes and other tobacco products, an unusual tactic employed by a government to protect the health of its citizens during the coronavirus pandemic. This is … A famous South African actor has been arrested in Polokwane for selling illegal cigarettes. South Africa has become the first country in the world in which the biggest brand in the tobacco industry is the illicit cigarette. The Beitbridge border post, 500 kilometers (310 miles) north of Johannesburg, is known as the main entry point for illegal cigarettes … Kaizer Chiefs preparing to face their worst nightmare: Bradley Grobler! BAT is one of the world’s most international businesses and many of its Group companies have their own websites. Address: Riverbank House, 1 Putney Bridge Approach, London, SW6 4TJ. Illegal cigarettes are easily identified by their price: any pack of 20 cigarettes selling for below R 20.01 in 2020 is suspicious. Illicit Trade in South Africa Fact sheet (489 kb). The wide availability of previously ultra-cheap local brands commonly found to be below MCT and an increased influx of non-compliant brands from neighbouring markets completely negated the health objectives of the prohibition as illicit suppliers exploited desperate consumers. Counterfeits of Gold Leaf products are being made in Lesotho and smuggled into South Africa, which may be the cause of the problem.”. BAT SA’s approach to fighting the black market in tobacco includes: BAT SA fully supports any action taken by the South African Police Service, SARS, the Southern African Customs Union, and other national and international bodies to curtail the illegal tobacco trade. While such illegal cigarettes would indeed be illegal, these do not form the bulk of illegal cigarettes sold in South Africa. South Africa, Africa's second-largest economy, has effectively banned smoking by making the sale of tobacco illegal in one of the most drastic public health measures introduced anywhere around the world during the pandemic. While such illegal cigarettes would indeed be illegal, these do not form the bulk of illegal cigarettes sold in South Africa. But while attention has been focused on neighbouring countries, the emergence of domestic producers has led to an explosion of cheap, tax-free cigarettes flooding the streets of South Africa. South Africa banned the sale of cigarettes and liquor during the national lockdown to slow down the spread of Covid-19. South Africa is … But the statics clearly point to Gold Leaf Tobacco being complicit, or at the very least, aware of the illegal cigarette trade under their brand. On average the brand is selling for R10.50 a pack. During South Africa's prohibition of cigarette sales, an estimated 93% of smokers bought their cigarettes from illegal sellers, according to research by the University of Cape Town published in July. These packets are sold well below the minimum tax rate charged by the South African Revenue Service (SARS). The UCT Research Unit on the Economics of Excisable Products (REEP) consumption studies conducted during the lockdown period found that during the prohibition, consumption continued unabated, with more than 90% of consumers still smoking. Where authorities request information or help from us, we will gladly assist. Address: Regus Business Centre The Protocol has been signed by representatives of all 6 WHO regions. by Luke Daniel. The net effect was that the illicit trade flourished and those with established supply chains reaped extraordinary profits for five months without any legal product competition. The sale of cheap cigarettes undermines carefully determined tax policy by reducing the sale price of cigarettes. This under-declaration of volumes equates to tax evasion and costs the South African fiscus a conservative estimate of R8 billion every year. As of 2020, the minimum collectible tax on a pack of 20 cigarettes is R20.01, making any pack selling for less than this suspect of being illegal. The latest tobacco market study from Ipsos shows not only a dramatic increase in the trade of illegal cigarettes in South Africa, but that the RG brand, by Gold Leaf Tobacco, is … South Africa became a Party to the WHO Framework Convention on Tobacco Control on July 18, 2005. JOHANNESBURG - The Tobacco Institute of Southern Africa says Gold Leaf Tobacco’s RG brand is now the biggest illegal cigarette brand in the country followed by Best Tobacco Company's brand, Caesar. As confirmed by an Eastern Cape High Court judgment in 2015 (National Director of Public Prosecutions v Adan, 2015), selling a pack of 20 below MCT is an indication that the requisite taxes may not have been paid, which is a contravention of the Customs and Excise and the Income Tax Acts. Members of the Hawks received a tip off about the suspects who were selling illegal cigarettes at a Polokwane taxi rank. Our South African history The “Be A Supplier” programme provides opportunities to Exempt Micro Enterprises and Qualifying Small Enterprises who can offer innovative solutions to our business. South Africa– Blue Sky Publications (Pty) Ltd T/A TheSouthAfrican Number: 2005/028472/07. Illegal cigarettes are cigarettes on which the correct excise tax has not been paid. Caused a hyperinflation of cigarettes prices in which prices skyrocketed by 4.4% per day. The ANC is a Mafia operation ..very much as it was in New York in the construction industry in the 80’s . Illegal cigarettes are either smuggled in from outside South Africa, or they’re secretly produced in-country, away from the gaze of the SA Revenue Service (Sars), according to experts. Three separate sources have confirmed to Moneyweb that the confiscated cigarettes belong to ATM Africa. 05-07-2018 18:53. in … Other studies done outside of South Africa have found that revenues from illegal trade support further criminal activities such as human trafficking, terrorism activities, and corruption, amongst various examples of criminal activities linked to illegal trade. South Africa has been fighting a protracted battle within the illegal cigarette industry, particularly against manufacturers in Zimbabwe smuggling contraband across the border. The main cigarette manufacturer in South Africa, BAT South Africa, produces around 20 billion sticks of cigarettes annually for both local consumption (BAT brands account for about 70% of consumption in South Africa) and for export, but its production is declining since the closure of its main production facility in Paarl in 2008. Your difference could make all the difference.Visit the BAT careers website to find out more about what it's like to work with us and search and apply for jobs. The country is one of just a few around the world to have banned tobacco sales during the pandemic and the only one to still have it in place. Sudan: None 18 (to enter smoking room or facility) 18 It is illegal to sell or give tobacco to a minor. Smoke Free Places. BAT has a proud heritage in South Africa of more than 100 years. The illegal tobacco trade is a growing scourge that requires greater co-operation and collaboration by all stakeholders to stamp it out. BAT South Africa’s business has declined by 30% since 2012, forcing us to adjust the size and structure of our business. Manufacturers of illegal cigarettes produce and earn profit on vast volumes of cigarettes, while paying SARS only a small portion of the tax owed. Illegal cigarettes today account for approximately 33% of all cigarettes sold in South Africa. Van der Merwe told IOL Business Report that the lack of tobacco regulation within the informal sector provides a fertile breeding ground for the illicit cigarette trade, with manufacturers skirting taxes and cashing in. During the 2020 Covid 19 Lockdown, with sales of cigarettes prohibited between Risk Adjusted Alert Levels 3 to 5, the South African tobacco value chain experienced an unprecedented increase of illicit trade. Dear Editor, South Africa (SA) imposed a 21-day lockdown from 26 March to 16 April 2020, through the disaster management Act (57/2002) and amended regulations [Section 27(2)] 1, to contain the spread of the coronavirus in the country.During the lockdown only essential goods have been allowed on sale 2.Tobacco and nicotine products were designated as non … A new report by Tax Justice SA (TJSA) finds that two of every three cigarettes sold in SA are illicit, making SA possibly the world’s largest black market for cigarettes. Copyright © Blue Sky Publications Ltd. All Rights Reserved. Parties commit to establishing tracking and tracing system to reduce, with aims to eradicate, illicit trade. Instead, South Africa’s illegal cigarette market is heavily dominated by local, licensed tobacco manufacturers who do not declare all their manufactured product to the South African Revenue Services (SARS). The British American Tobacco South Africa ( BATSA) on Monday launched an awareness campaign around the illicit trade of tobacco and cigarettes in SA. Such cigarettes are particularly prominent in the informal trade, where they make up an astounding 42% of the informal market. Stock cigarettes / Image: Gold Leaf Tobacco Corp. A report by the SA Tobacco Institute has revealed South Africa to be one of the world’s biggest markets for illegal cigarette sales. BAT is the largest cigarette manufacturer in South Africa and a long-time member of the Tobacco Institute. Instead, South Africa’s illegal cigarette market is heavily dominated by local, licensed tobacco manufacturers who do not declare all their manufactured product to the South African Revenue Services (SARS). These can easily be spotted by their low price. Caused almost 50% of South African smokers to switch from multinational brands to local brands. An illegal cigarette brand, RG, is now the biggest seller in the country, research released by the Tobacco Institute of Southern Africa shows. Tobacco Institute Chairman, Francois Van der Merwe, has alleged that local manufacturers are overproducing stock and retailing the surplus through informal convenience stores, or spaza shops. The tobacco conglomerate claim they pay R20 in taxes per packet of cigarettes, and that the sudden boom in illicit cigarette trading has affected their business, forcing them to retrench. Background The endgame literature recommends that, for a tobacco sales ban to be successful, several demand-side preconditions (eg, low prevalence and effective cessation support) should be in place. Essentially, cheap illegal cigarettes make smoking more accessible to those who might be deterred by higher prices. The illicit tobacco market in southern Africa is distinguished by two key facts: first, South Africa provides the largest, most profitable, and therefore most important consumer market and cigarette production hub; second, Zimbabwe is the biggest tobacco producer in the region and indeed the continent. Facts and figures come from the latest Ipsos Tobacco Market Study, released in November 2018. Speaking to Business Tech, Bongani Mshibe, Japan Tobacco International (JTI)’s corporate affairs and communications director for South, East & Central Africa said, ‘As the sale of illegal tobacco spirals out of control in SA, authorities continue to insist on further restricting the legal industry that complies with current tobacco regulations. Transferring the concept to a local example, a pack of 20 cigarettes selling for below the Minimum Collectible Tax (MCT), as announced by the Minister of Finance each year, should be considered illegal, according to an Eastern Cape High Court judgment in 2015 (National Director of Public Prosecutions versus Adan, 2015). The police minister says to date, 230,000 people have been arrested for breaking lockdown regulations and there's been a surge in the illegal trading of liquor and cigarettes … South Sudan: None Swaziland: None 18 It is illegal to sell and give tobacco to anyone under the age of 18 years. All cigarettes sold during South Africa’s unprecedented lockdown have likely been produced on the black market, and therefore poses serious dangers to your health, a local advocate against the sale of illicit products said. Complete The South African's latest reader survey by 31 March 2021 and win R6000 in cash. Illegal imports of cigarettes have been flooding South Africa since Gordhans times at SARS . An early […] Postal: Blue Sky Publications (Pty) Ltd T/A TheSouthAfrican, PO Box 44354, Claremont, 7735, South Africa, United Kingdom– Blue Sky Publications Ltd – Company Registration Number: 04683692. Tourist in your own country: Fall in love with South Africa again, Awkward! The illegal cigarette market in South Africa is a multi-billion Rand industry which cost the South African taxpayer more than R8 billion in lost taxes last year alone, and more than R40 billion since 2010. TheSouthAfrican.com is all about South Africa and the stories that affect South Africans, wherever they are in the world. Almost 400 jobs have been lost at the factory alone since 2014 due to the growth in illicit trade.”. 1st Floor, Block B, North Park, Black River Park, 2 Fir Street, Observatory, Cape Town, 7925, South Africa Raising awareness of the issue among our employees, business partners and the public. Raees Saint, Gold Leaf Tobacco’s (GLTC) attorney has released a statement following allegations of counterfeit production and sales: “Gold Leaf doesn’t evade taxes and allegations against the company in the report are false. Many of the illegal cigarettes sold in South Africa are smuggled in from Zimbabwe, which grows tobacco and manufactures cigarettes. British American Tobacco South AfricaWaterway House SouthNo 3 Dock RoadV&A WaterfrontCape Town, The Framework Convention on Tobacco Control, Illicit Trade and Counterfeit Goods Hotline, Contraband: Smuggled into markets from either neighbouring markets or transnational routes, Illegal whites: Unbranded, mass produced, unpackaged smuggled loose cigarettes, Local tax evaded: Locally produced cigarettes that enter the market from production leakages in the manufacturing and excise declaration process, Counterfeit: IP infringement of tobacco brands, Effective internal governance and supply chain security, Informing regulators about the impact of the illegal tobacco trade, Engaging stakeholders and regulatory bodies to increase understanding of the issue.
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