Smokers who pay R10 for a pack are smoking us all

There's a good chance this woman is smoking an illegal cigarette. Photo credit: www.pexels.com (2018)

If it was up to me I’d quadruple the tax on cigarettes … Imagine if we could get an extra R7 billion into the fiscus... maybe we can reduce some of the fuel taxes?

Bruce Whitfield, The Money Show

These cigarettes are all made in South Africa… We do not have a smuggling problem… 75% of all illicit products are made by Gold Leaf Tobacco Company… It makes the solution easy…

Francois van der Merwe, Tobacco Institute of South Africa

Illegal cigarettes – costing as little as R5 a pack – are sold in more than 100 000 shops across the country.

This is according to a report an Ipsos report, released on Thursday.

According to Ipsos, the sale of illegal cigarettes robs South Africans of R7 billion in taxes each year.

It also claims that South African cigarette companies are earning billions by failing to declare everything they produce in order to sell - tax free - to hawkers, spaza shops and corner cafés.

The Money Show’s Bruce Whitfield interviewed Tobacco Institute of South Africa Chairperson Francois van der Merwe.

Listen to the interview in the audio below (and/or scroll down for more quotes from it).

It’s a crime of tax not being paid… The minimum tax owed per pack of cigarette is R17.85… This year there will be 8 billion cigarettes sold for under R17.85… translating to a loss to Government of over R7 billion…

Francois van der Merwe, Tobacco Institute of South Africa

Plain packaging… it will become a counterfeiters’ paradise…

Francois van der Merwe, Tobacco Institute of South Africa

They declare a small part of their manufacturing volumes… but the bulk of the product goes out the backdoor…

Francois van der Merwe, Tobacco Institute of South Africa

The average price of illicit products are around R10 or R11, and you can even buy it for as low as R5 or R6…

Francois van der Merwe, Tobacco Institute of South Africa

We are going to share this with Sars, the Hawks and Parliament… We do not have enforcement powers… All these investigations were stopped under the previous Commissioner [Tom Moyane] in 2014…

Francois van der Merwe, Tobacco Institute of South Africa

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