Sars to deploy technology to clamp down on illicit tobacco trade

The South African Revenue Service (Sars) has taken decisive action to clamp down on the illicit tobacco trade which costs the country R8bn in lost revenue annually. A tender has gone out for the provision of a production management and a track and trace solution for cigarettes produced in the country which will enable the organisation to monitor the journey from cigarette manufacturing plants to points of sale and import or export trades.  “This non-intrusive technological innovation

is expected to boost the monitoring and control of duties and taxes in this industry significantly,” said spokesman for the revenue authority, Sandile Memela. The recently established Illicit Economy Unit at Sars had “hit the ground running” with a number of “impactful enforcement activities” already in the public domain, said Memela. The illicit economy ranged from an underground economy, which operated outside the rules and regulations of the country, to organised crime, and included the illicit

trade of products, he added.  “Sars has embarked on a process to mitigate such illicit and non-compliant activities by means of improved policy, enhanced processes and the use of advanced technology to uniquely marked products in order to strengthen the enforcement environment and ensure overall control of the supply chain,” Memela pointed out. Hence the tender for the track-and-trace marker technology in the cigarette industry. Francois van der Merwe, chairman of the Tobacco Institute of Southern Africa (Tisa) said that around 55% of the current revenue shortfall of around R8 billion could be filled through “strong intervention” in tackling the illegal cigarette market. “The illicit tobacco trade is one area where the new Sars commissioner, Edward Kieswetter, could make

an almost immediate and significant difference to our country at this critical time.” He said that Sars had already made headway in tackling the illicit operators involved in the illegal cigarette trade. “We urge Mr Kieswetter to continue this fight to its conclusion,” said Van der Merwe.  Around 350 local tobacco

farms are directly threatened by the illicit tobacco trade – of which about 50% are black-owned smallholder farms, according to Pietman Roos, Agri SA head of corporate affairs and communication. He said these producers were fully dependent on the legal tobacco industry in South Africa to purchase their produce. This non-intrusive technological innovation is expected to boost the monitoring and control of duties and taxes in this industry significantly. – Sandile Memela