Our law enforcement agencies have been very keen lately to show us their successes against criminals involved in the illicit cigarette trade.
Every week there seems to be another headline.
Smugglers are intercepted by the Border Management Authority. Police become involved in high-speed chases with vehicles packed with illicit cigarettes. Spaza shop owners are arrested with huge caches of contraband.
These operations are welcome. Every criminal caught is one less criminal operating freely.
But we would be badly misguided if we saw these headlines as evidence that South Africa is winning the war against illicit cigarettes.
They show precisely the opposite.
They demonstrate just how deeply this criminal trade has spread through our country.
The seizures, even those running into millions of rand, are merely the tip of an enormous iceberg. Beneath the surface lies a criminal industry that has carved a massive hole in South Africa’s finances.
The R30bn revenue drain
Industry experts have calculated that illicit cigarettes now account for around 75% of the market – that’s three in every four cigarettes sold. Other estimates may differ, but all point to an indisputably serious problem: the illicit cigarette trade is costing the fiscus more than R30 billion every year in unpaid taxes.
That is money that belongs to South Africans. Money that should be building schools, improving hospitals, providing housing, fixing infrastructure and putting more police officers on our streets.
Instead, billions of rand are disappearing into the pockets of criminals. And while we celebrate another bakkie full of cigarettes being confiscated, the people making fortunes from this trade continue to go unpunished.
Going beyond raids and seizures
Seven months ago, President Cyril Ramaphosa announced a National Illicit Economy Disruption Programme, identifying tobacco, fuel, alcohol and counterfeit goods as priority areas. We’re told that this is now operational and raids, seizures and criminal cases are taking place.
That is a start. But honest, hard-working citizens deserve to see the people at the top of these criminal networks brought before the courts.
We need to see kingpins, not just foot soldiers, in orange overalls.
Unanswered questions and allegations
More than three years have passed since Al Jazeera’s Gold Mafia investigation made explosive allegations about the networks operating a multi-billion-rand illicit cigarettes-and-gold smuggling racket in South Africa. Officials at major banks and high-profile businessmen were identified.
Yet the public is still waiting to see any criminal arrests, despite the seriousness of those revelations.
Then came the Madlanga Commission.
Evidence presented before the Commission has exposed disturbing links between senior figures in law enforcement and the tobacco industry.
WhatsApp messages placed before the Commission revealed an alleged relationship between suspended Crime Intelligence Major-General Feroz Khan and Mohamed “Mo” Sayed, a director of Johannesburg-based Carnilinx.
Whatever becomes of those allegations, society needs to acknowledge that illicit trade is a cancer eating into the fabric of our nation.
Organised crime in plain sight
Illicit tobacco is not simply about someone selling a cheap packet of cigarettes under the counter. It is organised crime.
The enormous profits generated by illicit markets can fuel wider criminal networks, corruption and money laundering.
When organised criminals become rich enough, they can buy influence, corrupt institutions and undermine the very agencies supposed to stop them.
That is why arresting the person driving a load of illegal cigarettes is not enough.
Arresting the spaza shop owner is not enough. Confiscating a truck is not enough.
Follow the money
We must follow the money. The South African Revenue Service (SARS) and other enforcement agencies must be properly funded, properly staffed and given the tools they need to investigate the manufacturers, financiers and networks behind this trade.
The National Prosecuting Authority (NPA) must be empowered to ensure that justice is done.
For several years, SARS has fought to exercise its right to install CCTV monitoring inside tobacco factories so that production, packaging and dispatch can be monitored and taxes properly accounted for.
So far, they have been prevented from doing so by legal challenges from a group of tobacco manufacturers who claim that would be a breach of their privacy.
But what are these businesses hiding? All over our country, cameras are used to stop criminals stealing. Why should SARS not use cameras to stop tobacco firms stealing money that belongs to us all?
Justice must reach the top
Every rand stolen through illicit trade is a rand stolen from ordinary South Africans.
We don’t need another task team whose success is measured by photographs of confiscated boxes.
We need investigations that reach the top.
Until that happens, we should stop pretending that justice is being done. Today, the war over illicit cigarettes is still being won by the criminals.
- Yusuf Abramjee is an activist and founder of Tax Justice South Africa, an anti-crime advocacy group that campaigns against illicit trade and massive tax evasion.
- Illicit cigarettes account for around 75% of the South African market, causing an estimated R30 billion loss in unpaid taxes annually.
- President Cyril Ramaphosa has launched the National Illicit Economy Disruption Programme to target tobacco, fuel, alcohol, and counterfeit goods, which is now operational.
- Investigations and allegations have revealed links between senior law enforcement officials and the tobacco industry, including suspended Major-General Feroz Khan and director Mohamed “Mo” Sayed.
- Legal challenges from tobacco manufacturers have prevented SARS from installing CCTV monitoring inside tobacco factories to better track production and taxation compliance.
- Despite frequent seizures and arrests of low-level offenders, activists stress that justice needs to reach the kingpins and organized crime networks behind the illicit cigarette trade.
Our law enforcement agencies have been very keen lately to show us their successes against criminals involved in the illicit cigarette trade.
Every week there seems to be another headline.
Smugglers are intercepted by the Border Management Authority. Police become involved in high-speed chases with vehicles packed with illicit cigarettes. Spaza shop owners are arrested with huge caches of contraband.
These operations are welcome. Every criminal caught is one less criminal operating freely.
But we would be badly misguided if we saw these headlines as evidence that South Africa is winning the war against illicit cigarettes.
They show precisely the opposite.
They demonstrate just how deeply this criminal trade has spread through our country.
The seizures, even those running into millions of rand, are merely the tip of an enormous iceberg. Beneath the surface lies a criminal industry that has carved a massive hole in South Africa’s finances.
Industry experts have calculated that illicit cigarettes now account for around 75% of the market – that’s three in every four cigarettes sold. Other estimates may differ, but all point to an indisputably serious problem: the illicit cigarette trade is costing the fiscus more than R30 billion every year in unpaid taxes.
That is money that belongs to South Africans. Money that should be building schools, improving hospitals, providing housing, fixing infrastructure and putting more police officers on our streets.
Instead, billions of rand are disappearing into the pockets of criminals. And while we celebrate another bakkie full of cigarettes being confiscated, the people making fortunes from this trade continue to go unpunished.
Seven months ago, President Cyril Ramaphosa announced a National Illicit Economy Disruption Programme, identifying tobacco, fuel, alcohol and counterfeit goods as priority areas. We’re told that this is now operational and raids, seizures and criminal cases are taking place.
That is a start. But honest, hard-working citizens deserve to see the people at the top of these criminal networks brought before the courts.
We need to see kingpins, not just foot soldiers, in orange overalls.
More than three years have passed since Al Jazeera’s Gold Mafia investigation made explosive allegations about the networks operating a multi-billion-rand illicit cigarettes-and-gold smuggling racket in South Africa. Officials at major banks and high-profile businessmen were identified.
Yet the public is still waiting to see any criminal arrests, despite the seriousness of those revelations.
Then came the Madlanga Commission.
Evidence presented before the Commission has exposed disturbing links between senior figures in law enforcement and the tobacco industry.
WhatsApp messages placed before the Commission revealed an alleged relationship between suspended Crime Intelligence Major-General Feroz Khan and Mohamed “Mo” Sayed, a director of Johannesburg-based Carnilinx.
Whatever becomes of those allegations, society needs to acknowledge that illicit trade is a cancer eating into the fabric of our nation.
Illicit tobacco is not simply about someone selling a cheap packet of cigarettes under the counter. It is organised crime.
The enormous profits generated by illicit markets can fuel wider criminal networks, corruption and money laundering.
When organised criminals become rich enough, they can buy influence, corrupt institutions and undermine the very agencies supposed to stop them.
That is why arresting the person driving a load of illegal cigarettes is not enough.
Arresting the spaza shop owner is not enough. Confiscating a truck is not enough.
We must follow the money. The South African Revenue Service (SARS) and other enforcement agencies must be properly funded, properly staffed and given the tools they need to investigate the manufacturers, financiers and networks behind this trade.
The National Prosecuting Authority (NPA) must be empowered to ensure that justice is done.
For several years, SARS has fought to exercise its right to install CCTV monitoring inside tobacco factories so that production, packaging and dispatch can be monitored and taxes properly accounted for.
So far, they have been prevented from doing so by legal challenges from a group of tobacco manufacturers who claim that would be a breach of their privacy.
But what are these businesses hiding? All over our country, cameras are used to stop criminals stealing. Why should SARS not use cameras to stop tobacco firms stealing money that belongs to us all?
Every rand stolen through illicit trade is a rand stolen from ordinary South Africans.
We don’t need another task team whose success is measured by photographs of confiscated boxes.
We need investigations that reach the top.
Until that happens, we should stop pretending that justice is being done. Today, the war over illicit cigarettes is still being won by the criminals.
- Yusuf Abramjee is an activist and founder of Tax Justice South Africa, an anti-crime advocacy group that campaigns against illicit trade and massive tax evasion.
