The rest of the top 20 cheapest brands are manufactured by South African manufacturers, except for the Remington Gold Zimbabwean variant and Manchester.
British American Tobacco South Africa (Batsa), which commissioned the study, said R28bn in annual tax revenue was lost to illicit trade, enough to exceed Sars’ entire additional collection target of R20bn.
Batsa corporate and regulatory head Johnny Moloto said despite increased raids and product seizures over the past year, illicit cigarette availability continued growing, indicating current strategies are ineffective.
“With the clock ticking for Sars to collect at least an extra R20bn, these results from Ipsos show the need for immediate steps to plug the leaks in tobacco tax collection. Despite increased enforcement activity over the past year, including more raids and product seizures, illicit products remain as available as ever, suggesting that current tactics are failing to address the root causes of tax evasion,” he said.
“Our analysis indicates that the illicit cigarette trade costs South Africa about R28bn annually — R100m every working day — representing more revenue than Sars’s entire additional collection target. Eliminating this leakage would protect law-abiding taxpayers from bearing additional tax burdens.”