British American Tobacco South Africa (BATSA) claims that the market has been completely taken over by illicit cigarette suppliers.
It said that the ban had cost over R4 billion in excise tax losses with 30,000 jobs lost in the industry since the lockdown came into effect.
“This means that tax-compliant manufacturers like ourselves continue to be at a disadvantage while the state is losing around R35 million every single day in excise taxes.”
The company’s Johnny Moloto said that replacing the ban on tobacco sales with increased excise was also not the way to go as it would compound the situation.
“With an already overstretched consumer, further increasing the cost of tobacco products will simply mean they default to the illicit market, which is now significantly cash-flush and can now afford to significantly reduce their prices.”
He also added that:
“These illicit supply chains will be so entrenched that it will be difficult for Sars to be able to reverse this or deal with this within a short period of time.”
