Overall, 19.6% of cigarettes were bought for less than R16.30, which was the tax amount at the time of the survey (Table 3), and 30.7% of cigarettes were bought for R20 per pack or less. Real excise revenue is displayed in millions of Rands, with 2016 as the base year. Although South Africa has not ratified the ITP, the Minister of Finance in 2018 committed the government to “extend the use of ‘fiscal markers’, which are required under the tracking and tracing obligations of the World Health Organization’s Protocol to Eliminate Illicit Trade in Tobacco Products” (National Treasury 2018). For the other demographic and socio-economic characteristics, the difference in the prevalence of cheap cigarette use is smaller. In recent years, the illicit trade of cigarettes in South Africa has been dominated by undeclared sales and ghost exports. South Africa Tobacco Transformation Alliance chairperson Ntando Shadrack Sibisi said millions of rands were being lost to illicit sales by the the South African Revenue Service daily. 2019). South Africa… South Africa Tobacco Transformation Alliance chairperson Ntando Shadrack Sibisi said millions of rands were being lost to illicit sales by the the South African Revenue Service daily. South Africa banned the sale of cigarettes and liquor during the national lockdown to slow down the spread of Covid-19. In the second half of 2018, TISA launched a major public relations campaign, called #TakeBackTheTax, in which members of the public were encouraged to sign a petition to “implore the South African Revenue Service, the Parliament of the Republic of South Africa and law enforcement agencies to act with urgency and take decisive steps in combatting the trade of illicit cigarettes” (TISA 2018). Accessed: 14 Mar 2019, Khumalo S (2018) Revived SARS illicit economy unit already eyeing 58 cases, says Kingon. The largest prevalence gradient is for education, where 40.4% of smokers with little to no education purchase cigarettes priced at R20 or less per pack, compared to 16% of smokers with tertiary education. 19 Oct 2018, Liedeman R, Mackay B (2015) A smokescreen economy: the nature and scale of the township grey market cigarette trade in Delft. South Africa’s problem with illicit trade is real, and it requires a coordinated and comprehensive response. By. The illicit trade in tobacco, especially cigarettes, costs South Africa’s economy billions of rand annually through lost tax revenue. To the extent that the original data were, in fact, valid, we would have distorted the data. Over the period of 25 days of the lockdown, our country stands to lose over R1.2bn in taxes. Cheap and readily available illicit cigarettes are a lucrative source of income for organised criminals. Crowd1 scam uses Eben Etzebeth, Duane Vermeulen…, Retire at 55 and live to 80; work till you’re…, Norma Mngoma, Malusi Gigaba’s wife, spills…, Financial stress, divorce, empty buy-to-lets: Why so…, © 2020 BizNews, Inc. | The Rational Perspective. Illicit cigarettes seized as Hawks raid Limpopo warehouse. Thus, it is reasonable to assume that this individual incorrectly reported spending R0.50 in total, and instead spent R0.50 per stick. Fighting illicit cigarettes; Clothing and Textile Smuggling; Illicit Economy in South Africa. About 20% of all single sticks are sold at R1 per stick (i.e. Source: Author’s own calculations, derived from various issues of the National Treasury Budget Review (1980–2018). I’m talking of excise duties. Accessed: 23 Jan 2019, Judge Nugent R (2018b) Commission of inquiry into tax administration and governance by the South African Revenue Service, Interim report. The appointment of Tom Moyane, a close ally of Jacob Zuma, is generally perceived as an integral part of “state capture”, which has cast a long shadow over Jacob Zuma’s presidency. In 2018, the Sunday Times again retracted these stories and acknowledged that they had allowed themselves to be manipulated by “a parallel political project aimed at undermining our democratic values and destroying state institutions and removing individuals who were seen as obstacles to this project” (Rupiah 2018). J Public Health 31:326–334, Rupiah K (2018) NOT the news. Forthcoming; Vellios et al. HH is a vector of household characteristics, including the natural logarithm of household income per capita, location type (urban or rural), and province. The illicit trade is very big in South Africa. The call came as an official from the South African Revenue Service (SARS) was remanded in custody following the seizure of a truck carrying R10 million worth of illicit cigarettes in Limpopo last week. South Africa is losing a large portion of its GDP every year, to the illicit economy. South Africa . Google+. The year 2010 marked a turning point for South Africa’s tobacco sector. Available at: https://web.archive.org/web/20190314123800/https://www.timeslive.co.za/sunday-times/opinion-and-analysis/2016-04-03-rogue-unit-never-broke-the-law-and-was-very-effective/. Of the 25,075 adults successfully interviewed in NIDS wave 5, 4224 indicated that they smoked cigarettes (Table 1), representing almost 6.7 million of the 34.6 million South African adults. Although our data does not allow us to investigate the source of the illicit cigarettes, we can make inferences from the provincial data. Illicit cigarettes are found across all nine provinces. Version 1.0.0 Pretoria: Department of Planning, monitoring, and evaluation [funding agency]. Individuals may not answer truthfully about whether they are smokers, or the number of cigarettes they smoke, because there may be stigmas associated with smoking, especially for specific demographic and cultural groups (Pérez-Stable et al. Independent Online Available at: https://webarchiveorg/save/https://wwwiolcoza/news/south-africa/gauteng/sars-target-of-tobacco-industry-backlash-1728457 31 Jul 2014, Siqoko B (2016) SARS and the Sunday times: our response. Using wave 5 of the National Income Dynamics Study (conducted in 2017), this paper investigates the market for very low-priced cigarettes in South Africa, which, in all probability, are illicit. Any cigarettes sold at a price below this could not have met the full tax amount. Subscribe to our Newsletter to get daily updates on local affairs, with a global context. The data used in this paper are publicly available and can be accessed at https://www.datafirst.uct.ac.za/dataportal/index.php/catalog/712. Table 5 presents the marginal effects at the average, taken from the logit regression, for smokers purchasing cigarettes at the four price thresholds (
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