SA losing billions to illegal tobacco and alcohol trade

SOUTH Africa’s economy continues to be threatened by illegal trade, specifically in sectors such as alcohol, tobacco, food items, pharmaceuticals, agri-chemicals, counterfeiting, mining, and wildlife trafficking.

- NICOLA MAWSON

Illicit trade in tobacco and alcohol alone is estimated to cost government R30 billion a year in lost revenue. Finance Minister Enoch Godongwana’s recent reversal of a 0.5 percentage point VAT hike will leave the fiscus with an estimated shortfall of R75bn.

This is according to the South Africa Illicit Economy 2.0 Report, launched by the Transnational Alliance to Combat Illicit Trade (TRACIT) in conjunction with Business Unity South Africa.

“Illicit trade continues to pose a serious threat to South Africa's economic stability, governance, and international standing,’ the report said. This comes at a time when the country is endeavouring to get itself removed from the Greylist of undesirable investment destinations.