Trouble at Sars has sparked a 20% drop in tobacco tax collection - analyst

The South African Revenue Service (Sars) has come under criticism for failing to chase down illegal cigarette barons.

Excise revenue collected from tobacco products dropped from R13 billion in the 2015/16 fiscal year to R12.1 billion in 2016/17 and to R10.9 billion in 2017/18.

This is a 16% drop over the period, says tobacco control expert Professor Corné van Walbeek.

Prof Walbeek says there has been a 20% decrease in the number of declared cigarettes in South Africa over two years.

He explains that excise tax, which is currently R15.52 per pack, is levied at the point of manufacture.

Read more: Sars plans to stamp out illicit cigarette trade

According to Walbeek, income and cigarette pricing influence the demand for cigarettes.

He argues that the decline in excise revenue shows how illegal cigarette barons have taken advantage of a weakened revenue service.

Walbeek says the erosion of Sars, and its inability to stamp out tax evasion, has ignited the growth of the illicit market.

Companies are no longer declaring cigarettes.

Prof Corné van Walbeek, head of the Economics of Tobacco Control Project at UCT

It has much to do with the fact that Sars' ability to follow up on the tax evaders had been hollowed out to the extent that people are taking chances.

Prof Corné van Walbeek, head of the Economics of Tobacco Control Project at UCT

There's been a gradual decrease in smoking prevalence.

Prof Corné van Walbeek, head of the Economics of Tobacco Control Project at UCT

The price of cigarettes and income of people impact the number of smokers and cigarettes traded.

Prof Corné van Walbeek, head of the Economics of Tobacco Control Project at UCT

Listen to his expert analysis on the local tobacco industry:


This article first appeared on CapeTalk : Trouble at Sars has sparked a 20% drop in tobacco tax collection - analyst


Recommended

by NEWSROOM AI
Read More
Sars plans to stamp out illicit cigarette trade

Sars plans to stamp out illicit cigarette trade

Sars group executive for customs compliance risk William Mpye talks through plans to root out the illicit tobacco trade.

'82% of South Africans want to see  graphic health warnings on cigarette packs'

'82% of South Africans want to see graphic health warnings on cigarette packs'

Savera Kalideen, executive director of the national council against smoking said e-cigarettes can also cause lung diseases.

[LISTEN] Illicit traders must be brought to book and pay taxes -FAWU

[LISTEN] Illicit traders must be brought to book and pay taxes -FAWU

The Food and Allied Workers Union is marching to SARS HQ to demand action against illicit traders.

City of Tshwane  gets tough on smokers

City of Tshwane gets tough on smokers

The city is cracking down on smokers who flout smoking rules.

'If you are the cigar smoking,whiskey type, you will be hardest hit by sin tax'

'If you are the cigar smoking,whiskey type, you will be hardest hit by sin tax'

PwC Chief Economist, Lullu Krugel shares her insight on the impact of Wednesday's budget speech.

'E-cigarettes less harmful than cigarettes, but not harmless'

'E-cigarettes less harmful than cigarettes, but not harmless'

E-cigarettes are not covered under existing legalisation in the same manner as combustible cigarettes, says anti-smoking group.

Soon you may not be able to light up in public (indoors or out!)

Soon you may not be able to light up in public (indoors or out!)

The Dept of Health is looking to introduce draft legislation that includes a complete ban on all smoking in public areas.

Is the cigarette about to be extinguished by an electrical version?

Is the cigarette about to be extinguished by an electrical version?

After seven years, electronic cigarettes sales now stand at R35 billion a year with plenty of room to grow in the R8 trillion industry.

Popular articles
[LISTEN] Pallo Jordan says leaked Mbeki paper on land is 'unfortunate'

[LISTEN] Pallo Jordan says leaked Mbeki paper on land is 'unfortunate'

The leaked 30 paper, seemingly from the Thabo Mbeki Foundation, has been met with mixed reaction.

SA braces for horrific fuel price increases as oil hits 4-year high

SA braces for horrific fuel price increases as oil hits 4-year high

It's monstrous! The Money Show’s Bruce Whitfield interviews the Automobile Association of South Africa's Layton Beard.

Dros rape: 'He was sitting near the kid's play area...he had his eye on her'

Dros rape: 'He was sitting near the kid's play area...he had his eye on her'

The man allegedly attacked the six-year-old inside a toilet cubicle at a Dros franchise in Pretoria on Saturday.

'She says I'm just waiting for this c**lie to move so I can take the photo'

'She says I'm just waiting for this c**lie to move so I can take the photo'

A caller on the Eusebius McKaiser Show, Zeenat says she was called a derogatory word for Indian on Heritage Day.

'This leaked document is calling a spade a spade'

'This leaked document is calling a spade a spade'

Breakfast Show Host Bongani Bngwa shares his views on the leaked report from the Thabo Mbeki Foundation.

[WATCH] Vietnam's The Bachelor uproar as female contestants run away together

[WATCH] Vietnam's The Bachelor uproar as female contestants run away together

Khabazela shares some of the most popular tweets, posts, and videos on 'What's gone viral'.