Cigarette trade 'captured by cartel'

SMOKESCREEN: MAFIAS 'USE TOBACCO TO LAUNDER BILLIONS'

- Sipho Mabena

South Africa's tobacco market has been captured by criminal syndicates, with as much as three-quarters of all cigarettes now sold coming from illicit sources, costing the fiscus billions of rands every year.

South African Revenue Services (Sars) commissioner Edward Kieswetter yesterday told the parliament's portfolio committee on health that according to independent research from the University of Cape Town, Ipsos, and Tax Justice SA, the illicit tobacco trade has spiked from 19% of the market in 2014 to 75% in 2025.

He said between 2020 and 2022, Sars lost about R84 billion in excise tax revenue.

According to Sars data, between 2020 and 2025, an estimated R40 billion in legitimate tax revenue vanished due to illicit trade, with criminal syndicates exploiting porous borders, weak enforcement and the Covid lockdown disruptions to entrench dominance.

"We are confronting industrial-scale criminality involving sophisticated financial flows, front companies and complicit enablers across sectors - including banking and logistics," Kieswetter said.

He said investigations have linked some tobacco networks to money laundering through gold refineries, property developments, and offshore investments in countries such as the UAE and the UK.