Lobby group accuses Gold Leaf Tobacco of tax evasion and illict trade during ban

Tax Justice South Africa says it has submitted evidence to authorities proving that Gold Leaf Tobacco has been dodging its excise taxes by selling cheap cigarettes online.

Gold Leaf Tobacco Corporation (GLTC), a member of the Fair-Trade Independent Tobacco Association (Fita), has been accused of tax evasion by selling their cigarettes online at significantly reduced rates.

It's alleged that GLTC cigarette brands had dominated the illicit trade market during the nearly five-month ban on the sale of cigarettes.

According to a UCT study, GLTC brand RG sold 10 million cigarettes each day during lockdown at prices that were up to five times higher, without paying any taxes.

I will be on @eNCA shortly talking about GCTC and give full details about how cigarettes are being sold on-line to the public and to people under the age of 18- in contravention of the law. @TaxJustice_SA pic.twitter.com/WMzwD3vwyJ
— Yusuf Abramjee (@Abramjee) September 16, 2020

Yusuf Abramjee, the founder of Tax Justice SA, says the organisation received a number of tip-offs about the illicit sale of GLTC brands online during the tobacco ban.

Abramjee claims tobacco giant GLTC delivers a single carton of cigarettes nationwide for only R225.

He says the online sale of cigarettes to private customers is in direct defiance of the Tobacco Control Act.

He adds that Tax Justice SA has handed over its evidence to the SA Police Service (SAPS) SA Revenue Service (SARS) and Department of Health to investigate.

Tobacco giant GLTC will deliver a single carton of cigarettes to your door anywhere in SA for R225. The taxes they should pay to @sarstax are R203.50.
IF they're paying their tax, we reckon they're losing R100 per carton! ⁰How is that possible @fita_sa @SinenMnguni? @the_dti pic.twitter.com/Q17DPnYlCd
— Tax Justice South Africa (@TaxJustice_SA) September 15, 2020

Evidence of dodgy tactics by Gold Leaf Tobacco Corporation has been handed to the relevant legal authorities. @fita_sa @SinenMnguni say there's nothing suspicious in it.
We'll see what @SAPoliceService @sarstax @HealthZA think. pic.twitter.com/ksF7CokXux
— Tax Justice South Africa (@TaxJustice_SA) September 15, 2020

Meanwhile, Fita has accused Tax Justice SA of being funded by Big Tobacco to bring down local manufacturers.

Abramjee has denied allegations that the organisation is driven by any other business interests.

He adds that GLTC has taken legal action against him in the past for previous blowing the whistle on the tobacco company's involvement in the illicit cigarette trade.

A UCT study found that during the lockdown Gold Leaf products were number one. They topped the market during the cigarette ban.
Yusuf Abramjee, Founder - Tax Justice South Africa

Their products were still readily available. The research speaks for itself.
Yusuf Abramjee, Founder - Tax Justice South Africa

We logged onto their website and we found that cigarettes could be bought on the internet through their website to private customers, in direct contravention of the Tobacco Control Act.
Yusuf Abramjee, Founder - Tax Justice South Africa

GLTC has no checks and balances to verify the identity if these customers or to establish that they are above the legal age of 18.
Yusuf Abramjee, Founder - Tax Justice South Africa

Online customers can buy a single carton for as little as R22.50 per pack, including nationwide delivery, suggesting that Gold Leaf Tobacco is not paying their due taxes per pack of 20 cigarettes.
Yusuf Abramjee, Founder - Tax Justice South Africa

Clearly they are breaking the law. We want SARS to investigate the fact that these cigarettes are being sold at just a rand or two over the minimum excise and VAT payable.
Yusuf Abramjee, Founder - Tax Justice South Africa

Listen to the discussion on Today with Kieno Kammies: