About 31% of the 30 billion cigarettes puffed in South Africa annually are illegal. And it is costing the government about R5-billion a year in lost tax revenue.
The illicit trade was highlighted at a conference in Cape Town attended by authorities including the Hawks police unit.
Illicit cigarettes are either manufactured locally and not declared for tax purposes or smuggled into the country. Figures for the number of illicit cigarettes consumed do not include those stolen from factories or hijacked from trucks.
Francois van der Merwe, CEO of the Tobacco Institute of Southern Africa, called on the government, including the Department of Health, to fight the problem.
"We don't want to have a reputation as an illicit haven," he said.
About 60% of all illicit cigarettes consumed in South Africa were made locally, he said.
Manufacturers often practised "excise manipulation", declaring only a percentage of their products to SARS. The rest were put on the market for as little as R10 a packet.
This fuelled consumption and went against the Department of Health's objective to reduce smoking," Van der Merwe said.
According to the institute, Gauteng, the Western Cape and Eastern Cape had the highest concentration of illicit products.
Hawks spokesman Paul Ramaloko warned that illegal cigarettes fuelled organised crime. The proceeds were often used to fund rhino poaching, abalone smuggling and human trafficking.
Howard Pugh, senior specialist for Europol, said the illicit tobacco trade cost the EU about R150-billion in lost revenue annually.
"Millions of dollars in illicit tobacco revenues are reaching alQaeda, the Taliban, other terrorist organisations and organised crime groups," he said.
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.
Go to: http://www.inet.co.za
