South Africa: Cigarette maker accused of smuggling during pandemic

In South Africa, the tobacco company Gold Leaf Tobacco Corporation (GLTC), a member of the Fair Trade Independent Tobacco Association (Fita), is accused of having organized cigarette smuggling during the pandemic. The NGO Tax Justice South Africa, which brought the accusation, announced that it had filed evidence with the South African courts.[1].

The Gold Leaf Tobacco Corporation is said to have sold more than ten million cigarettes per day for five months, while the government had exceptionally banned the sale of tobacco products, due to the context of the Coronavirus pandemic. The cigarette manufacturer is being singled out for offering cigarettes at reduced prices, and practicing tax evasion by not paying taxes on the sale of its products. Finally, these sales, made outside of any legal framework, offered no guarantee on the protection of minors from smoking.

Prices significantly reduced

According to the data made available, GLTC was selling and delivering cartons of cigarettes to homes for R225, or €11.65, while the taxes on such a product alone amount to R203.50 (€10.53). Tax Justice South Africa estimates that if GLTC had charged these prices and paid the taxes, the cigarette company would have lost R100 per carton (€5.18).

Smuggling, a recurring practice in the industry

For its part, FITA accused Tax Justice South Africa of having been financed by the tobacco industry majors in order to harm local manufacturers. As a reminder, FITA had initiated a legal action against the government's decision to suspend tobacco sales in South Africa. FITA asserted the "necessary" nature of tobacco consumption. This argument was not accepted by the High Court of Justice in Pretoria. While the tobacco industry massively exploits the argument of illicit trade to block tax increases, these accusations, if proven, show once again that cigarette manufacturers do not hesitate to organize tobacco trafficking themselves.[2], which they publicly claim to oppose. The tobacco industry's ability to deviate from legality indicates the need not to consider it as a legitimate and reliable partner for public authorities.

Keywords: Smuggling

©Tobacco Free Generation

[1] Lobby group accuses Gold Leaf Tobacco of tax evasion and illicit trade during ban, Cape Talk, September 16, 2020, accessed the same day

[2] Gilmore, Rowell, « The Tobacco industry's latest scam: How Big Tobacco is still facilitating tobacco smuggling, while also attempting to control a global system designed to prevent it », Tobacco Control, 2018

National Committee Against Smoking |