INVESTIGATIONS by Sars into the gold and tobacco industry revealed more than R7 billion in dodged tax.
Finance Minister Enoch Godongwana announced this as he delivered the budget speech on Wednesday, 21 February. But there's no mention of arrests of masterminds or criminal charges, which an anti-tax corruption organsation has deemed as a red flag.
On 3 January, Daily Sun reported plans by Sars to fix eyes on tobacco warehouses via CCTV to smoke out illicit cigarette kingpins following a ruling handed down by the Gauteng High Court on 29 December 2023.
The installation of these CCTV cameras in tobacco warehouses was the first step in smoking out illicit cigarette kingpins robbing Mzansi of billions and plans seem to have proved to be a success.
Godongwana said investigations and prosecutions have resulted in R10 billion in additional assessments from the key players in the illicit gold and tobacco industry.
According to Godongwana, these and other efforts have helped with the improvement in revenue which is currently posing a great challenge.
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“Our bigger challenge, as I have stated earlier, is that our pie is not growing fast enough and this limits our ability to generate sufficient revenues to distribute among our priority areas,” he said.
He, however, did assure the country that plans to recover the revenue are in place among those increasing tax on alcohol and tobacco as well as introduction of tax payment for famously loved hubbly bubbly, e-cigarettes and other alternatives.
While TAX Justice SA has welcomed the investigations into the gold and tobacco industries, it questioned why there was no mention of arrest or criminal charges, which raised more red flags.
“It is evident that gangsters controlling South Africa’s cigarette trade are being allowed to continue operating with impunity and no fear.
“While they do so, the nation will continue to be looted of over R27 billion in vital tax revenue annually by illicit cigarette barons,” said TAX Justice SA founder Yusuf Abramjee.
He argued against the new excise tax hike as it will "force even more consumers to the illegal sector, driving the criminals’ market share beyond 80% and making us a world leader in lawlessness".
He urged government to take action against organised criminal gangs that are plundering Mzansi.
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