The South African Revenue Service (SARS) and the Tobacco Institute of Southern Africa (TISA) have destroyed illicit and counterfeit cigarettes, estimated to be worth R100-million if it were to be sold legally with all excise duties being paid to government.
In a media release SARS says that “the destruction operation in Springs, which started on Tuesday earlier this week, has seen over 100 million cigarette sticks being destroyed. They were seized during various attempts to bring them into South Africa illegally through various methods of concealment and smuggling.” The smuggling of cigarettes and other high-value items across South Africa’s poorly patrolled borders and through border-posts annually costs the state billions in customs duties and other taxes.
According to TISA, the illicit trade in cigarettes currently comprises more than 20% of the total cigarette market in South Africa. This equates to more than 15 million cigarettes being sold illegally every day, or more than 6 billion per year. This defrauds the fiscus of more than R2.6 billion in unpaid excise duties. Furthermore, illegal cigarettes pose an even greater threat to people’s health, as these products do not comply with the strict Government regulations to which legal manufacturers and traders adhere, the statement added.
SARS Customs and Enforcements teams seized the cigarettes due to non- compliance with the legislation governing the importation of tobacco products during a number of search and seizure operations. Section 43 of the Customs and Excise Act empowers the SARS Commissioner to dispose of goods which are condemned and forfeited to be destroyed.
Gene Ravele, Chief Officer of Customs and Border Management said: “To make such an impact in the trade of illicit cigarettes is a victory for both the industry and for SARS, as there are potentially billions of rands in excise duties that SARS would not receive. SARS is committed to working with TISA and other industries that are affected by the illicit trade that fails to comply with our country’s laws.”
TISA CEO and Chairman Francois van der Merwe said: “TISA wants to commend SARS and all law enforcement agencies for taking a firm and no-nonsense approach towards illicit operators, and its willingness to work with industry, as demonstrated by this destruction of millions of illegal cigarettes. TISA believes that private/public partnerships between TISA, SARS and other Government agencies is the only way to create a win/win situation in solving problems like illicit trade.”
SARS urges members of the public to contact its Fraud and Anti Corruption hotline on 0800 00 28 70 should they wish to report any suspicious business activity or alternatively to contact TISA’s hotline at 0800 21 47 10 to report any unethical practices in the cigarette industry.
For more on this subject, consider attending defenceWeb‘s Border Control conference at Gallagher Estate on March 17 and 18, 2010. For more information contact Maggie Pienaar at ++27 11 807 3294 or [email protected]