Saturday, August 12, 2006

Illegal cigarettes cost the country billions.

By Tando Mfengwana

According to the South African Revenue Services, illegal trade of cigarettes is growing at a 2% rate each year in South Africa.

This means that almost R2 Billion in revenue is lost every year, money that can be used to build about 12 500 low cost houses, almost a 100 000 families could have owned their homes.

Illegal trade in tobacco products has grown from zero ten years ago to more than 20% of the total South African market.

The Weekend Argus reports that in Gauteng this is almost 30%, with some vendors selling illicit products almost exclusively.

Cigarettes are especially attractive for illegal traders because they have a high value-to-volume ratio and are relatively easy to transport. They also offer a high profit prospect than most other fast moving consumer goods, due to significant tax portion of the retail price.



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