{"id":840615,"date":"2025-10-22T12:00:00","date_gmt":"2025-10-22T10:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=840615"},"modified":"2025-10-22T11:57:40","modified_gmt":"2025-10-22T09:57:40","slug":"international-criminal-mafias-are-entering-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/840615\/international-criminal-mafias-are-entering-south-africa\/","title":{"rendered":"International mafias and crime cartels are flooding into South Africa"},"content":{"rendered":"\n

The South African Revenue Service (SARS) has warned that international criminal mafias and syndicates are partnering with South African networks to enter local illicit markets.<\/p>\n\n\n\n

Presenting its views on the new South Africa\u2019s Tobacco Products and Electronic Delivery Systems Control Bill to the portfolio committee on health, SARS flagged major disruptions to tax collection due to rapid growth of the illicit market.<\/p>\n\n\n\n

The taxman’s data shows that, despite rising tobacco consumption in South Africa over the last five years, tax collection from the sector has stagnated.<\/p>\n\n\n\n

This has led to a R40 billion gap in tax collection post-Covid-19, not including displaced consumption that has been taken up by the illicit trade.<\/p>\n\n\n\n

SARS noted that the prohibition on smoking put in place during the Covid-19 pandemic by the South African government significantly altered the licit and illicit parts of the tobacco sector.<\/p>\n\n\n\n

This pushed traditional crime cartels, syndicates and gangs into becoming involved in the illicit cigarette trade, it said.<\/p>\n\n\n\n

Citing three different research papers, the revenue service pointed to the illicit tobacco industry in South Africa being between 60% and 75% of the entire sector, with tax losses between R51 billion and R84 billion.<\/p>\n\n\n\n

The rapid scaling up of the black market for tobacco also emboldened these syndicates and mafias to start getting involved and invest in other illicit sectors, it said.<\/p>\n\n\n\n

This “diversification” has spread to mining and refinery, property development, and it has also seen these syndicates “invest” in other countries such as the United Kingdom, the UAE, and in central and southern Africa.<\/p>\n\n\n\n

“Fraud schemes have become more complex and specifically designed to avoid FIC obligations and SARS scrutiny,” SARS said.<\/p>\n\n\n\n

Worse still, “foreign cartels and syndicates (have) developed relationships with local cartels and syndicates and entered the South African market.<\/strong>“<\/p>\n\n\n\n

SARS said that syndicates have formed new relationships with money laundering channels, illicit financial flows and related “service providers”, and many of these channels are rooted in the illicit tobacco sector.<\/p>\n\n\n\n

The revenue service noted that some tobacco syndicates had become money laundering facilitators themselves due to the inordinate amounts of cash they had on hand.<\/p>\n\n\n\n

It also confirmed that an unnamed bank collaborated with and enabled the manipulation of the computerised banking system to remove transactions, thereby avoiding detection by the South African Reserve Bank and SARS.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

There is chance for recovery<\/h2>\n\n\n\n

Despite the overwhelming and rapid growth of the illicit sector, SARS has not been without its own victories.<\/p>\n\n\n\n

The service reported an overall recovery of about R6 billion in revenue through its financial and criminal investigations into trades.<\/p>\n\n\n\n

It has conducted over 40 property search and seizure operations, revoked eight licences, and handed 86 cases over for criminal prosecution.<\/p>\n\n\n\n

There are 28 ongoing audits without another potential R6 billion that could be recovered, while there have been assessments and schedules raised valued at R45 billion.<\/p>\n\n\n\n

The revenue service is also trying to clamp down on the illicit traders by installing CCTV cameras at manufacturing sites. However, this has been halted, pending ongoing litigation.<\/p>\n\n\n\n

SARS is ultimately throwing its weight behind the new tobacco bill, which, if put into effect, will see tobacco traders cut advertising, adopt plain packaging and a host of other measures to try and curb consumption.<\/p>\n\n\n\n

While the tax service warned that these measures will only be effective if there is adequate enforcement, it welcomed the alignment with e-cigarettes into the excisable products regime.<\/p>\n\n\n\n

Importantly, it called on the committee and government to equip it with more regulatory and policy powers to better tackle illicit trades.<\/p>\n\n\n\n

This includes harsher penalties and a “zero tolerance” framework, as well as a strengthened licensing regime.<\/p>\n\n\n\n

SARS also wants to employ more excise officers and auditors to focus on these industries specifically, focusing on high-risk items, alongside a dedicated legal team to fast-track litigation against offenders.<\/p>\n","protected":false},"excerpt":{"rendered":"

SARS warns that international criminal mafias and syndicates are partnering with South African networks to enter local illicit markets\u2014and they’re “investing” in new markets.<\/p>\n","protected":false},"author":10,"featured_media":834796,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[23882,21952,3246],"class_list":["post-840615","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-cartel","tag-mafia","tag-sars"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=840615"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840615\/revisions"}],"predecessor-version":[{"id":840657,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840615\/revisions\/840657"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/834796"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=840615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=840615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=840615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}