THE ban on selling tobacco and cigarettes during the hard lockdown last year led to a rise in the sale of fake cigarettes.
Despite the ban having been lifted, the industry continues to grow while Treasury loses billions in sin taxes.
This was revealed by independent market researcher Ispos in a report released recently.
The report reveals that almost half (43%) of spaza shops, wholesale vendors and street hawkers are now selling cigarettes for less than the minimum collectible tax level of R21,60.
The cheapest pack of cigarettes researchers were able to find cost just R8, and the cheapest carton was R70.
The Western Cape, Free State, Gauteng and Norther Cape were identified as hot spot areas.
The SunTeam spoke to a number of smokers who’ve been buying illegal cigarettes.
Teboho Mokete (38) said: “I’ve been smoking since high school and it’s difficult to quit. The government has been denying us jobs. How can we afford to pay more and contribute to tax? For the past 10 years since I was retrenched, I’ve been struggling to find work and I rely on odd jobs to survive.”
A 29-year-old smoker said all cigarettes were bad for one’s health, so it didn’t matter which brand you bought, only how much you paid.
A 40-year-old said his working hours were reduced since the start of the pandemic.
“I might one day return to my old brand if I find a better-paying job,” he said.
Spaza shop owners didn’t really want to speak, but said they stocked illegal cigarettes because of high demand.
A street vendor said: “These cigarettes are cheap to stock and quick to sell. All I’m interested in is making sure my children don’t go to bed hungry.”
In a statement, British American Tobacco South Africa general manager Johnny Moloto said the illegal trade was out of control.
“Over a year since the disastrous lockdown sales ban, the illegal network it enabled and continues to dominate the retail sector. They are destroying legal jobs and livelihoods and depriving Treasury of R19 billion in cigarette excise for 2021 alone,” he said.
Tax Justice South Africa founder Yusuf Abramjee said criminal manufacturers were swamping the market.
“They’re making a fortune while the nation is looted of vital funds that could combat the pandemic and rebuild our shattered economy,” he said.
