NEWS
03/05/2018 07:07 SAST | Updated 03/05/2018 07:07 SAST

Sars Vows To Clamp Down On Illicit Tobacco Trade, Admits Not Enough Has Been Done Till Now

Parliament has heard that until now, Sars was not doing enough to clamp down on illicit tobacco trade.

Mark Kingon, acting commissioner for the South African Revenue Service (SARS), speaks during a news conference in Pretoria, South Africa, on Tuesday, April 3, 2018.
Bloomberg via Getty Images
Mark Kingon, acting commissioner for the South African Revenue Service (SARS), speaks during a news conference in Pretoria, South Africa, on Tuesday, April 3, 2018.

The South African Revenue Service (Sars) admits that not enough has been done to clamp down on the illicit tobacco trade, but its new acting commissioner Mark Kingon is committed to changing this, Fin24 reported.

Sars officials appeared before Parliament's standing committee on finance on Wednesday.

Sars group executive for customs compliance risk and case selection William Mpye reportedly told MPs: "At the outset, we need to acknowledge that we have not done enough in the past two to three years. More needs to be done in the field. The acting commissioner [Mark Kingon] alluded to the fact Sars will raise efforts to make sure the issue is dealt with better, going forward."

The Tobacco Institute of South Africa's chairperson, Francois van der Merwe reportedly told MPs that Sars had done nothing to stop the problem until now.

"It was a time for illicit traders to make money," he reportedly said.

According to Business Day, finance committee chairperson Yunus Carrim called on finance minister Nhlanhla Nene to put together a team to combat the issue.

Van der Merwe reportedly told MPs that at least a quarter of the tobacco industry in SA was illegal and that the fiscus had lost an estimated R27-billion in unpaid taxes on tobacco products since 2010.

NPA acting special director of public prosecutions Marlini Govender reportedly said South Africa ranks amongst the top five countries in the world with the highest amount of trade in illicit tobacco.

National Treasury's Chris Axelson, director of personal income taxes and saving, Chris Axelson reportedly said capacity at Sars and other enforcement agencies needed to be increased. According to Fin24, he said,

"The big thing is we need to get to the bottom of these allegations. The inquiry into Sars needs to look into this and find out what actually happened. What can be done to strengthen that? A lot of these things have arisen from industry involvement," said Axelson.

In his 2017 book, The President's Keepers, investigative journalist Jaques Pauw details allegations that tobacco smugglers had members of the Zuma family in their pocket. It was alleged that suspected tobacco smugglers paid thousands every year to Edward Zuma, and that a controversial cigarette manufacturer was funding Nkosazana Dlamini-Zuma's election campaign.

There were also allegations that cigarette smugglers were being paid by politicians to spy on each other, and that they were close to EFF leader Julius Malema and former state security minister David Mahlobo.