Tax Justice SA (TJSA), South Africa’s tax watchdog, has expressed its support for the recent decision by the North Gauteng High Court regarding the mandatory installation of Close-Circuit Televisions (CCTVs) at tobacco warehouses. This development comes amidst the persistent issue of cigarette smuggling between South Africa and Zimbabwe.
Several tobacco companies had challenged the South African Revenue Services (SARS) on the installation of CCTVs in their warehouses but faced setbacks as their arguments were dismissed. These closed-circuit televisions, also known as video surveillance systems, use cameras to transmit signals to specific locations and monitors.
South Africa has emerged as a significant destination and conduit for cigarette smuggling, particularly through the Beitbridge Border Post and illegal crossing points along the Limpopo River. It is estimated that 30% of cigarettes in South Africa originate from Zimbabwe, including brands such as Pacific, Remington Gold, Mega, Dullahs, Branson, and Servilles.
TJSA founder, Mr. Yusuf Abramjee, welcomed the legal victory against illicit tobacco traders and urged authorities to enforce the law rigorously. He stated, “The Tax Justice SA welcomes a vital legal breakthrough against the illicit tobacco barons who are stealing billions of rand from South Africa and is today urging authorities to now enforce the law to prevent this industrial-scale looting.”
Abramjee emphasized that cigarette manufacturers must comply with laws enabling SARS to monitor the true volume of cigarettes being produced and sold. Syndicates have been exploiting legal gaps to evade taxes and engage in large-scale illegal activities.
The legal challenge against the CCTV regulations was led by the Fair-Trade Independent Tobacco Association (FITA), representing local cigarette makers. Eleven tobacco companies had sought to prevent SARS from implementing “Rule 19.09” under the Customs and Excise Act. This rule requires licensed tobacco product manufacturers and warehouses to allow SARS to install CCTV monitoring equipment.
Tax Justice SA has accused cigarette manufacturers in South Africa of paying only lip service to tax laws, contributing to the surge in tobacco smuggling. The demand for Zimbabwean tobacco and related products in other countries has fueled organized syndicates engaged in illegal trade and smuggling.
Exporting cigarettes from Zimbabwe to South Africa has become challenging due to the high excise duty rates in the latter country. Cigarettes imported from Zimbabwe into South Africa incur a rate of R6.21 per 10 cigarettes.
