Trouble at Sars has sparked a 20% drop in tobacco tax collection - analyst

The South African Revenue Service (Sars) has come under criticism for failing to chase down illegal cigarette barons.

Excise revenue collected from tobacco products dropped from R13 billion in the 2015/16 fiscal year to R12.1 billion in 2016/17 and to R10.9 billion in 2017/18.

This is a 16% drop over the period, says tobacco control expert Professor Corné van Walbeek.

Prof Walbeek says there has been a 20% decrease in the number of declared cigarettes in South Africa over two years.

He explains that excise tax, which is currently R15.52 per pack, is levied at the point of manufacture.

Read more: Sars plans to stamp out illicit cigarette trade

According to Walbeek, income and cigarette pricing influence the demand for cigarettes.

He argues that the decline in excise revenue shows how illegal cigarette barons have taken advantage of a weakened revenue service.

Walbeek says the erosion of Sars, and its inability to stamp out tax evasion, has ignited the growth of the illicit market.

Companies are no longer declaring cigarettes.

Prof Corné van Walbeek, head of the Economics of Tobacco Control Project at UCT

It has much to do with the fact that Sars' ability to follow up on the tax evaders had been hollowed out to the extent that people are taking chances.

Prof Corné van Walbeek, head of the Economics of Tobacco Control Project at UCT

There's been a gradual decrease in smoking prevalence.

Prof Corné van Walbeek, head of the Economics of Tobacco Control Project at UCT

The price of cigarettes and income of people impact the number of smokers and cigarettes traded.

Prof Corné van Walbeek, head of the Economics of Tobacco Control Project at UCT

Listen to his expert analysis on the local tobacco industry:


Recommended

by NEWSROOM AI
Read More
Sars plans to stamp out illicit cigarette trade

Sars plans to stamp out illicit cigarette trade

Sars group executive for customs compliance risk William Mpye talks through plans to root out the illicit tobacco trade.

'82% of South Africans want to see  graphic health warnings on cigarette packs'

'82% of South Africans want to see graphic health warnings on cigarette packs'

Savera Kalideen, executive director of the national council against smoking said e-cigarettes can also cause lung diseases.

[LISTEN] Illicit traders must be brought to book and pay taxes -FAWU

[LISTEN] Illicit traders must be brought to book and pay taxes -FAWU

The Food and Allied Workers Union is marching to SARS HQ to demand action against illicit traders.

City of Tshwane  gets tough on smokers

City of Tshwane gets tough on smokers

The city is cracking down on smokers who flout smoking rules.

'If you are the cigar smoking,whiskey type, you will be hardest hit by sin tax'

'If you are the cigar smoking,whiskey type, you will be hardest hit by sin tax'

PwC Chief Economist, Lullu Krugel shares her insight on the impact of Wednesday's budget speech.

'E-cigarettes less harmful than cigarettes, but not harmless'

'E-cigarettes less harmful than cigarettes, but not harmless'

E-cigarettes are not covered under existing legalisation in the same manner as combustible cigarettes, says anti-smoking group.

Soon you may not be able to light up in public (indoors or out!)

Soon you may not be able to light up in public (indoors or out!)

The Dept of Health is looking to introduce draft legislation that includes a complete ban on all smoking in public areas.

Is the cigarette about to be extinguished by an electrical version?

Is the cigarette about to be extinguished by an electrical version?

After seven years, electronic cigarettes sales now stand at R35 billion a year with plenty of room to grow in the R8 trillion industry.

Popular articles
Comedy of errors suggests Standard Bank bond applicants have much to worry about

Comedy of errors suggests Standard Bank bond applicants have much to worry about

Only when consumer journalist Wendy Knowler chased Standard Bank did they admit wrongdoing that cost a client R41 000.

Dozens of families evicted from Kraaifontein farm

Dozens of families evicted from Kraaifontein farm

Plass senior researcher Dr Farai Mtero explains what the law says about evictions.

Land Claims Court ruling: 'Jubilation when judgment was handed down'

Land Claims Court ruling: 'Jubilation when judgment was handed down'

Association of Rural Advancement director Laurel Oettle praises ruling by ConCourt to uphold move to appoint a special master.

[WATCH] Ndlovu Youth Choir shines once again with latest AGT performance

[WATCH] Ndlovu Youth Choir shines once again with latest AGT performance

The inspiring South African choirU2's Beautiful Day at America's Got Talent quarter-finals.

SA’s richest woman opens up about being a refugee and becoming a billionaire

SA’s richest woman opens up about being a refugee and becoming a billionaire

Magda Wierzycka – Sygnia’s renegade CEO – on her attitude toward money (hopes and fears, successes and failures, etc.).

Mystery solved: Why smelly, blue sewage has been leaking into Cape Town forest

Mystery solved: Why smelly, blue sewage has been leaking into Cape Town forest

The reason for the leakage has been revealed, explains Table Mountain Aerial Cableway MD Wahida Parker.

W Cape traffic chief: Stay close to other motorists on N2 to stay safe

W Cape traffic chief: Stay close to other motorists on N2 to stay safe

W Cape Traffic Chief Kenny Africa says private security working with the department is helping curb the stonings on the highway.

Were missing SA men victims of Vietnamese organ harvesting syndicate?

Were missing SA men victims of Vietnamese organ harvesting syndicate?

Gift of the Givers fears two South African men who went missing in Vietnam may have fallen prey to an organ harvesting syndicate.

[WATCH] SA youth choir shines on America's Got Talent with 'My African Dream'

[WATCH] SA youth choir shines on America's Got Talent with 'My African Dream'

The Ndlovu Youth Choir's beautiful performance got 4 yesses from the judges, including Simon Cowell!