SARS destroys R43 million worth of smuggled cigarettes
The South African Revenue Service (SARS) has started to destroy R43 million of illicit cigarettes smuggled through the Beitbridge border post bordering Zimbabwe.
This forms part of the customs division of SARS’s major push to crackdown on illicit goods filtering into South Africa, bypassing excise and customs levies.
These goods making their way into South Africa rob the government of essential tax revenue, said SARS.
The deputy commissioner of SARS, Johnstone Makhubu, said a huge volume of cigarettes would be destroyed, in total 2,000 master cases, or 20 million cigarettes, with the process expected to take days.
Johnny Moloto, the general manager of British American Tobacco South Africa (BATSA), said in August 2022 that almost 70% of all cigarettes consumed in South Africa now belong to illicit brands.
Ipsos market researchers added that the illicit trade of cigarettes reached an all-time high in November 2021, with nearly half of all stores (43%) across the country selling illegal cigarettes.
The cigarettes were seized through collaboration between SARS, the police, the defence force and the Hawks.
According to SARS, its customs division has a steadfast intent to promote voluntary compliance among taxpayers and traders – meaning that SARS has strategic objectives to make it easy and simple to comply and hard and costly to refuse.
“This means SARS has zero tolerance for persons or organisations that are involved in tax crime or illicit trade and that SARS will pursue them relentlessly,” the tax authority said.
SARS said that illegal cigarettes are not the only smuggled good that robs the government of much-needed revenue and destroys industries.
It added that products which are being imported or exported include but are not limited to:
- Second-hand motor vehicles
- Poultry
- Clothing, leather and textiles
- Essential infrastructure (copper and steel)
- Gold
An inter-agency working group (IAWG) has been set up to deal with all aspects of illicit trade,
Approximately 10% of the total revenue collected by the revenue service (SARS) comes from high-volume daily consumables like alcohol, tobacco, petrol, and luxury items, as stated by the revenue service.
The director of customs and excise, Beyers Theron, said customs has put in place measures to grant benefits to compliant traders through the Accredited Economic Operator model.
“These benefits include cost-savings and quicker turnaround times, amongst others. Similarly, SARS is busy implementing SMART border technology to increase its detection capability and response to non-compliance,” said Theron.
He said that: “since the inception of its co-ordinated and focused investigations Customs has been conducting over the past three years in the tobacco and cigarette industry, there has been a noticeable shift to increased cross-border smuggling using “runners”.”
“These are not individuals smuggling these cigarettes as an entrepreneurial opportunity but organised criminal syndicates exploiting the unemployed and the poor by employing individuals as runners to carry goods, often for miles, across borders.
“These runners carry at least two master cases of illicit cigarettes on their backs per un, often repeating these trips multiple times. These cigarettes are then loaded into trucks, small goods vehicles, cars and taxis, that wait at locations along the border for distribution to their intended destinations on the local market.”
The recent development of R43 million being seized forms part of a number of busts, including one from 2 May, where SARS intercepted a truck carrying 100 master cases of illicit cigarettes valued at roughly R20 million and on 20 May, when SARS seized a further R9 million in illicit tobacco products.
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