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SAFTU demands crack-down on illicit trading and tax-evasion

The South African Federation of Trade Unions is fully in support of its affiliate, the Food and Allied Workers’ Union, who marched on 14 August 2018, to demand the end of the illicit trade in the tobacco, sugar and various other industries.

At a time when the poorest South Africans are suffering from the impact of the increases in VAT, the fuel and Road Accident Fund levies and the knock-on effect of increased prices, it is outrageous that billions rands of taxable income is being lost, and that our local tobacco industry is suffering, as  illegal traders flood the market with counterfeit products.

These illicit traders are causing severe harm – to tax-payers, who have to make up the huge amount of lost revenue, to consumers whose health is even more at risk from sub-standard products and to workers in the legal tobacco, sugar and other industries.

FAWU insists that it is “concerned about the general health of consumers as these counterfeit tobacco products are not verified by services such as South African Bureau of Standards. SARS should redeploy investigative units that used to operate in the past in order to crack down on these illegal traders who make billions of rands in profits by selling counterfeit products for far below the cost price of a single pack of cigarettes.”

The union has also demanded the urgent deployment of SARS officials in factories, and the criminalisation of selling tobacco products below minimum collectible tax levels, as part of the Tax Administration Law Bills currently out for pubic comment. Although these are not counterfeit products, the manufacturers are still evading paying tax.

SAFTU is well aware of the health hazards of tobacco and sugar, but insists that solving this problem cannot be at the cost of the workers in the legitimate industry losing their jobs while illegal traders and tax-dodgers defraud the country of billions of rands of taxes and put consumers’ health in even greater danger by peddling untested counterfeit goods.

The federation agrees totally with FAWU General Secretary, Katishi Masemola, that  “We want National Treasury to fund SARS to improve the capabilities of individual officers and its overall institutional capacity to monitor the borders and do inspection internally at factories. We also want SARS to specifically clamp down on illegal cigarette factories suspected of illicit trade, given the alleged R 7 billion rands in lost revenues.”