The National Treasury budgeted that R15bn would be collected from tobacco excise taxes in the 2020/21 financial year. The 20-week sales ban means the government lost about R5.8bn during this period.
“There are no angels in the industry. All tobacco companies, both the multinationals and the locally based companies, have been accused and/or found guilty of various kinds of wrongdoing,” said the report.
“The non-multinationals, which more than the multinationals have previously been found to sell cigarettes at prices at which it is impossible for the full tax to have been paid, have benefited disproportionately from the ban.
“Because they already had well-established distribution channels into the illicit market before the ban, it seems likely that the sales ban has entrenched that market.”
The researchers estimate that if there is one tobacco-related death for every million cigarettes smoked, the decrease in the quantity of cigarettes smoked during the 20 weeks of the sales ban is likely to have prevented about 2,300 future premature tobacco-related deaths.
A large increase in the excise tax at the start of the lockdown would probably have yielded a similar outcome, in terms of a reduction in cigarette use and a decrease in smoking prevalence, as the sales ban, said the report. “However, it would probably have been less disruptive and yielded more revenue for government.
“That the already well-established illicit market became more entrenched during the sales ban has complicated the task, for Sars and other law enforcement agencies, of reducing the illicit market.”
Clamping down should be a national priority, said the report.
