Cooperative Governance and Traditional Affairs (Cogta) minister Nkosazana Dlamini-Zuma cannot promise that she will not reinstate a ban on the sale of cigarettes and other tobacco products.
While the sale of tobacco products was lifted for the first time in nearly five months on Tuesday (18 August), the future of tobacco sales remains a key point in an ongoing court case between the government and tobacco companies.
The Fair Trade Independent Tobacco Association (Fita) has told the government that if it promises not impose a tobacco ban in the future, it will withdraw its case, News24 reported.
In a letter sent by the state attorney to Fita, the government said that Dlamini-Zuma cannot give an undertaking and agree to this condition as it limits the minister’s powers under the Disaster Management Act.
“This is not because they intend to reinstate the temporary prohibition at a later stage, but simply because agreeing to this condition would constitute an impermissible and unlawful fettering of the minister’s discretion conferred upon her in terms of the Disaster Management Act 57 of 2002.
“‘That said, the minister can, and does, undertake that any future decision regarding the sale of tobacco and tobacco products, if any, would be taken in accordance with the law and the requirements of legality.”
Dlamini-Zuma initially banned tobacco sales, citing the dangers of Covid-19 as a respiratory disease.
“There was evidence coming from other countries showing that some smokers tend to have a more serious disease which means we will need more ICU beds and maybe more ventilators,” she said.
“On the other hand, the results of stopping smoking do show pretty quickly. Your respiratory tract does improve quickly and just your general well-being improves – that’s why it was prohibited temporarily.”
Cost of ban
The prohibition on alcohol and cigarette sales has come at a hefty cost to South Africa’s fiscus, said South African Revenue Service (SARS) commissioner Edward Kieswetter.
Kieswetter said that the country already faced a shortfall as a result of the nationwide coronavirus lockdown.
He said that employment taxes are down by R14.5 billion (around 9%), while corporate income tax is down R16 billion (28%).
Other notable figures include:
- Tax from alcohol was down by R7 billion;
- Tax from cigarettes was down by R3 billion;
- VAT was down R14.5 billion;
- Customs duty was down by R16.7 billion,
“If you then add the downstream taxes from those companies you will also add the loss in corporate income tax and employment taxes that gets you to a shortfall of R15 billion,” said Kieswetter.