U-turn on cigarette sales is economic sabotage and music to the ears of crooks, says Tax Justice SA

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PRETORIA - Tax Justice South Africa has condemned the announcement by government’s national command council on coronavirus sale of cigarettes and tobacco products will remain prohibited next month when South Africa enters level 4 of the nationwide lockdown, reversing last week's announcement that cigarettes will be sold from May 1. “The ill-thought prohibition of cigarettes is impoverishing the nation, enriching criminals and destroying the public’s faith in the lockdown. The government is throwing away R35 million every day in taxes at a time when its citizens are starving,” TJSA founder Yusuf Abramjee, said on Wednesday. . "Meanwhile, criminals are pocketing that money by luring South Africa’s 11 million smokers to the black market. “This is life-endangering economic sabotage that hands trade to the organised syndicates who flourished under SA’s decade of ruinous leadership. "Illicit cigarettes are flooding the market at massively inflated prices, delivering no tax to the country and actively increasing the movement of people – the very thing the lockdown is supposed to prevent.”

Abramjee said after 34 days of lockdown and prohibition of sale of cigarettes, the government knows that the illicit economy is flourishing.

“Government knows the illicit economy is booming. Earlier this week, a report by the Human Sciences Research Council (HSRC) found that one in four informal settlement residents have been able to buy cigarettes, and illegal traders have been cashing in nationwide,” Abramjee said.

“The HSRC recommended that urgent measures be taken to combat the problem of illegal trade. But Minister Nkosazana Dlamini-Zuma’s announcement contradicts that advice, spurns vital revenue and permits crime to thrive.”

Last week, President Cyril Ramaphosa announced South Africa will be slightly easing the lockdown regulations from the current level 5 to a level 4 from May 1, and that the sale of cigarettes will resume.

“The sale of cigarettes will be permitted. The range of goods that may be sold will be extended to incorporate certain additional categories. These will be detailed by the relevant ministers,” Ramaphosa said in a televised address to the nation.

On Wednesday night, the Minister of Cooperative Governance and Traditional Affairs, Dlamini-Zuma, announded government’s u-turn on the cigarettes matter, announcing it has resolved to continue with the prohibition of sale of cigarettes and alcohol even next month.

“On Saturday we had said we are consulting. We had consulted about allowing cigarettes and related products – tobacco. Even at that press conference there was quite an opposition to that.

"Even in the public comments there was quite an opposition – more than 2 000 people opposed that,” she said during a national command council briefing in Pretoria.

“The government then took that into consideration and decided that we must continue as we are when it comes to cigarettes and tobacco products. The reasons are health related.

"As we know, besides the effects of tobacco on a person’s lungs, but also on the way it is shared does not allow for social distancing.”

Dlamini-Zuma said smoking would encourage the spread of the novel coronavirus.

Abramjee said Dlamini Zuma’s announcement would be music to the criminals ears.

“Those crooks and gangsters who thought their free-run was over when President Ramaphosa announced lifting of the ban last week are still very much in business. They will be partying tonight,” Abramjee said.