Congrats, South Africans who used to smoke – you’ve now gone more than 120 days without a cigarette.
Hang on, what’s that? Oh, I’m getting news that making the sale of tobacco illegal has not, in fact, stopped people from smoking, but rather cost the country a fortune in lost tax revenue, whilst turning ordinary South Africans into criminals.
In addition to that, the criminal enterprises that operate in the illicit trade in cigarettes have only strengthened their hold on the local market, to the detriment of those that play by the rules.
Yup, just as study after study has shown, the ban has been a complete and utter failure.
To understand how things work, Carte Blanche recently tracked the various steps from production through to sales.
If you want to go one better, The Daily Maverick’s webinar, hosted by Scorpio journalist Pauli van Wyk and featuring former SARS lawyer Telita Snyckers, is about as good as it gets.
Some background before you dive in:
It is estimated that illicit cigarettes made up around 40% of the cigarette trade in South Africa and had shown “no sign of slowing down”. Under the Covid-19 ban, all cigarette sales have been declared illegal.
Telita Snyckers, an independent illicit trade expert and former SA Revenue Service executive, says there are no angels in the mix of manufacturers that operate in SA.
In her book Dirty Tobacco: Spies, Lies and Mega-Profits she uncovers the dark underbelly of the tobacco industry. She recounts the instances where Big Tobacco itself was caught red-handed and explores not only why a listed company would want to smuggle its own product, but also how it was done. And during a national cigarette ban under Covid-19 protocols, she says these practices are more prevalent than ever.
Snyckers told Van Wyk that the ban was a very bad policy decision by the government, as both illegal traders and legitimate tobacco companies are now raking in more profits than ever before.
Evidence against the efficacy of the ban on the sale of tobacco just keeps mounting, and yet, here we are.
The webinar is a lengthy one, but does a fantastic job of laying out why this trade is so lucrative.
Just listen to the stats presented in the first five minutes, if you’re not going to hang around:
Congrats if you made it through the entire webinar without rage smoking back to back ciggies.
A little more of that was covered, for those who didn’t:
The country loses about R35-million a day in tax revenue from the ban on cigarette sales and Snyckers attributed this loss of revenue to the rise in cases of illicit tobacco trade since the lockdown began in March.
Snyckers, who worked at the tax authority for many years, says the South African Revenue Service is trying to rebuild the capacity to investigate and eradicate these unlawful practices after former SARS commissioner Tom Moyane disbanded the organisation’s investigative capacity and Project Honey Badger that was established to clean up local smuggling rings. At the time, it was in the process of busting close to R3-billion in illegal activity.
Like so much that happened under the Zuma reign (and by extension, at least so far, the Ramaphosa reign), if the cadres were benefitting from the operation of an illegal enterprise, any attempts to crack down on it were stifled.
Meanwhile, around the country, South Africans pay a small fortune for black market cigarettes, and the gaping hole from the loss of tax revenue grows wider.
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