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SA Revenue Service Confiscated Illegal Cigarettes Worth R77m During Lockdown, Says Mboweni

Counterfeit cigarettes are to be burnt to generate electricity at an incineration power plant in Xuchang city, central Chinas Henan province, 13 March 2015. The Tobacco Monopoly Bureau of Xuchang county, Henan province reportedly delivered a total of 447 cartons of counterfeit cigarettes to an incineration power plant to generate electricity on March 13. According to China News, the fake cigarettes, including some 50 different brands, were seized during 2014. Workers at the incineration power plant were seen offloading cartons from several trucks and preparing them to be burned. The fake cigarettes were eventually burned at the power plant, generating over 10,000 kWh of electricity.

Finance Minister Tito Mboweni has revealed that the SA Revenue Service has confiscated illegal cigarettes worth R77 million since the start of the national lockdown.

In his speech delivered during the National Treasury’s budget vote, Mboweni announced that the illegal cigarette bust was up from R15m compared to the similar period last year.

“In line with this stated strategic objective Sars has accordingly seized illegal cigarettes worth R77m in the period April 1 to date, up from R15m in the prior year.

“The increase in seizures has been largely due to joint operations between Sars, SA National Defence Force and SA Police Service,” he said.

Mboweni said the role of Sars commissioner Edward Kieswetter and his team was critical.

President Cyril Ramaphosa announced the Covid-19-enforced national lockdown from late March and included the ban on tobacco, tobacco products, e-cigarettes and related products.

The cigarette ban prompted the Fair-Trade Independent Tobacco Association (Fita) to haul Ramaphosa and Cooperative Governance and Traditional Affairs Minister Dr. Nkosazana Dlamini Zuma to the North Gauteng High Court in a bid to overturn the decision.

However, a full bench of the high court – Judge President Dunstan Mlambo, judges Daisy Molefe and Annali Basson – dismissed Fita’s application with costs.

On Friday, the judges also dismissed Fita’s application for leave to appeal their ruling with costs.

A full bench of the Western Cape High Court will hear arguments in British American Tobacco SA’s separate application attacking the constitutionality of the cigarette ban.

The company describes the regulations banning the sale of tobacco products as an unconstitutional infringement to a number of rights enshrined in the Constitution.

It argues that the ban on “tobacco, tobacco products, e-cigarettes and related products” infringes on the right of tobacco farmers, processors and tobacconists (tobacco shops) to freedom of trade, occupation or profession.

In addition, according to Mboweni, Sars has seized rhino horns weighing 137kg and collected R225m from one illicit second-hand gold industry.

Last month, Mboweni tabled a supplementary budget projecting a R304.1 billion shortfall in tax revenue and it reflected an expectation that the tax base will temporarily shrink as businesses close and people lose their jobs.

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