Union takes illicit cigarettes trade battle to National Treasury
Pretoria - Members of the Food and Allied Workers’ Union (Fawu) joined tobacco farmers and informal traders on Tuesday as they marched to the National Treasury offices in Pretoria CBD, protesting about the thriving inflow of illegal cigarettes into the South African market, suffocating the local business.
“Our mandate is to protect the jobs of South African workers because they are the fuel of our economy. We know that the illicit trade of tobacco is a huge problem that continues to cripple the development of our economy," said Katishi Masemola, general secretary of Fawu.
"These criminals are getting away with a wide range of serious offences, including tax evasion, which is in turn eradicating jobs.
“Although these criminals are known - absolutely nothing is being done to bring them to book, which is unacceptable.”
In its memorandum of demands, Fawu wants the South African government to immediately clamp down on the suppliers of the illicit tobacco. Among other interventions, Fawu wants South African Revenue Service (Sars) to place customs officials at tobacco factories “to ensure that all manufacturers are playing fair and paying their share”.
“Fawu is also calling Minister of Finance, Nhlanhla Nene, to maintain tobacco prices at current levels until the crisis of illegal cigarettes is clearly under control," said the Fawu memorandum.
"In June, Treasury disclosed to the Sars Inquiry that recent tax increases had caused revenues to decline. The government has at least R7 billion to collect from the criminals before it places any more burdens on taxpayers,”
Fawu added that the local informal business sector, “which is the backbone of township economies and source of jobs for people in townships is crumbling due to the infestation of the market with illicit cigarettes
"Tobacco farmers and retailers said as the business of illicit cigarettes continues unabated, South African entities might have to close shop soon and fire thousands of workers.
“Over the years we have seen a huge decline in the purchasing of local tobacco leaf, forcing us to shed thousands of jobs in the farming sector. Criminals are killing our industry” said Cristo Van Staden, managing director of Limpopo Tobacco Processors.
A study conducted by Ipsos earlier this year revealed that South Africa has become one of the world’s biggest markets for illicit cigarette sales and is losing about 7 billion rand ($510 million) a year through related tax evasion.
The Ipsos report, done on behalf of the Tobacco Institute of Southern Africa (Tisa), says illegal cigarettes are available in more than 100 000 shops across South Africa. The cigarettes are smuggled across the border, particularly from neighbouring Zimbabwe.