SA LEADS Africa in the illicit trade in tobacco and is listed among the top five illicit markets globally, according to the Tobacco Institute of Southern Africa, which represents tobacco growers, leaf merchants, processors, manufacturers, importers and exporters of tobacco products in SA.
More than R20bn in tax revenue has been lost in SA since 2010 due to the illicit trade in tobacco, the institute’s CEO, Francois van der Merwe, said on Wednesday.
The problem is severe in SA, but Zambia, Namibia and Swaziland have estimated incidences of well above the global average of between 10% and 12%.
Mr van der Merwe said efforts to combat the illicit trade in tobacco were complicated by the links that the business had with transnational organised crime syndicates, some of which funded terrorism.
"The problem runs far deeper than enormous losses of fiscal income that could have been put to good use to bolster government efforts in education, infrastructure development and poverty alleviation," said Mr van der Merwe.
He was speaking ahead of a meeting later in November of global, regional and local law enforcement, along with revenue and customs agencies in Cape Town, who will seek better ways to collaborate in addressing the illicit tobacco trade in sub-Saharan Africa.
"We have seen first hand what effective focus on combating illicit trade by government can achieve," said Mr van der Merwe, ascribing a decrease in the illicit tobacco trade, from 31% to 23% this year, to better collaboration.
"This is in the most part due to the excellent efforts by the various law enforcement, customs and revenue, Treasury and defence departments in the South African government."
Mr Van der Merwe said that although the declining numbers in SA were encouraging, this did not bode well for the rest of the region as organised crime was a moving target prone to shifting its focus to "easier" markets when it was under attack.
He claimed that those who traded in illicit products, whether cigarettes, alcohol, textiles or DVDs, or committed environmental crimes such as rhino poaching or abalone smuggling were most often also involved in other serious crimes and even the funding of terrorism and money laundering.