Cigarette war lights up

R7BN: SARS ALLEGEDLY LOSES FROM TOBACCO PRODUCERS

Gold Leaf Tobacco hits back, saying it has paid more than R8.2 billion in excise duties over the past 12 years.

Gold Leaf Tobacco says it has paid more than R8.2 billion in excise duties over the last 12 years.

Gold Leaf Tobacco has responded sharply to a recent Moneyweb article on the #takebackthetax advertising campaign funded by the Tobacco Institute of SA (Tisa).

The campaign, with slogans such as “Petrol will be cheaper if we take back our R7 billion” and “VAT doesn’t have to increase if we take back our R7 billion” aims to highlight tax evasion by the manufacturers of illicit cigarettes.

Tisa alleges that SA Revenue Service (Sars) fails to collect R7 billion in taxes every year by neglecting to inspect all tobacco producers properly.

Gold Leaf Tobacco took issue with Moneyweb for quoting from a recent Ipsos research report stating that RG, a Gold Leaf Tobacco brand selling for an average of just over R10 per packet, is the second largest selling brand in South Africa after the popular Peter Stuyvesant.

This is not true, says Gold Leaf Tobacco by way of a letter from its lawyers, Saint Attorneys. Gold Leaf Tobacco disputes the Ipsos report completely, saying it was commissioned and paid for by Tisa, which it says is largely funded by British American Tobacco.

Gold Leaf Tobacco chief executive Ebrahim Adamjee says in a separate letter to Moneyweb that the agenda behind the publication of such a report is to “discredit our good business name among the citizens of our country. We deny being involved in any tax evasive practices whatsoever and rubbish all allegations levelled against us in this regard.”

Adamjee says Gold Leaf Tobacco paid R1.37 billion in excise duty in 2017 and excise duties this year will probably exceed R1.8 billion, of which R804 million has been paid already. He also says Gold Leaf Tobacco is audited by Sars on a regular basis.

Gold Leaf Tobacco says the conclusion that its RG brand is the second biggest cigarette brand in South Africa is simply untrue and points to the amounts paid by way of excise and custom duties as proof that it does not sell such big volumes. Adamjee concurs that the methodology of the Ipsos report was flawed or the conclusion was deliberately misleading.

“GLT [Gold Leaf Tobacco] is fully tax compliant of all customs and excise duties,” Adamjee says.

His explanation of the fact that several Gold Leaf Tobacco products are available in shops at prices lower than the minimum tax payable on cigarettes is that it might be counterfeit products.

“GLT is currently fighting a legal battle in Lesotho for counterfeit of its products,” says Saint Attorneys on behalf of Gold Leaf Tobacco.

The solution is simple. Sars must act against retailers that sell cigarettes for less than the minimum tax payable. In 2015, an Eastern Cape High Court judgment found that tobacco selling for prices less than the minimum collectible tax must be illegal.

GLT is currently fighting a legal battle in Lesotho for counterfeit of its products.

Saint Attorneys Lawyers for Gold Leaf Tobacco