‘Illicit cigarettes’ threatens jobs

AUTHORITIES have come under pressure to clamp down on the allegedly tax-dodging manufacturers of illicit cigarettes.

New research has claimed that illegal cigarettes are now dominating the market share, deposing Peter Stuyvesant as a preferred brand.

The report by research group Ipsos, conducted on behalf of the Tobacco Institute of Southern Africa (Tisa), said RG – an “illicit brand” – was now the mostly-bought cigarette in South Africa.

The report said RG and others have overtaken traditional brands by evading excise tax and thereby managing to keep their prices as low as R10 per pack.

Francois van der Merwe, a tobacco farmer and Tisa’s chairperson, decried what he described as empty promises by the state to tackle manufacturers of illegal brands.

He said Tisa had given Sars solid information about the manufacturers and their modus operandi.

“Illegal cigarettes are manufactured locally in factories licensed by Sars,” he said.

This also dispelled the belief that illicit cigarettes were counterfeits manufactured outside of South Africa.

Just last week, the Lesotho Revenue Authority confiscated 380 000 RG loose draws at the Maseru Bridge.

The 12 000 jobs in the traditional tobacco sector are threatened, Van der Merwe said.

Dumisani Sibeko, a shop steward at a Heidelberg factory, said yesterday that workers were hard-hit.

“There were retrenchments two months ago. Due to the decline of business, 50 workers lost their jobs. We used to produce 20 million sticks per annum, but we’re now sitting at 17 million sticks,” he said.

However, Gold Leaf Tobacco, manufacturer of RG, said Sars had never had to act against their brand because it was above board.

“Our RG brand is registered with Sars and there is nothing illicit about it,” said attorney Raees Saint.

“We have been constant contributors to the fiscus. We have, in the last 12 years, paid an amount of nearly R8.2bn in excise duties alone.”

– Bongani Nkosi