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The Harm Outweighs Intended Positive Outcomes: Tax Justice SA Urges Ramaphosa To Lift Tobacco Ban

Tax Justice SA (TJSA) has urged President Cyril Ramaphosa to lift the ban on tobacco sales as the government’s case crumbles, saying that at a time when South Africans should unite against the unprecedented coronavirus (Covid-19) adversity, “they are being told that crime pays”.

TJSA has written to Ramaphosa urging him to lift the tobacco ban as court papers emerge destroying government’s case for the 18-week-old sales prohibition, TJSA founder Yusuf Abramjee said in a statement on Sunday.

In the letter, TJSA said the unintended consequences of this ban had caused harm that far outweighed whatever positive outcomes it hoped to achieve. It was threatening livelihoods, rewarding illegal enterprises, and eroding taxpayer morality.

On Sunday, News24 reported that there were devastating contradictions in a 251-page response by government to the legal challenge to the ban, led by British American Tobacco SA, which would be heard in the Western Cape High Court on Wednesday.

Key among these was the admission that smokers were “less likely to be infected” with the coronavirus and develop Covid-19. In more apparently inadvertent confusion, government argued that cigarette purchasing during lockdown had increased inter-personal contact – as compared with ordinary shoppers – without acknowledging its own ban on legal cigarette sales could be to blame, Abramjee said.

Meanwhile, Michael Evans, attorney for the 10 applicants in the tobacco case, said on Sunday that government itself had shown that the cigarette ban would have “absolutely minimal” effect on medical services.

Even if it were true that smokers infected with Covid-19 were at risk of developing more severe forms the disease, government’s own figures proved that only 16 ICU beds would be freed up by the ban – out of a national total of 3500, Evans, a partner at Webber Wentzel, told CapeTalk radio.

“That is an absolutely minimal gain, because against that you have a massive impact on society. The entire tobacco industry has been affected and that’s not just big manufacturers, it’s small farmers and retailers as well. You’ve had a massive boost to the illicit trade and the fiscus has been deprived of R4 billion in excise duties,” Evans reportedly said.

In its letter, TJSA pointed out that no scientific evidence showing a connection between smoking and Covid-19 had been presented, and South Africa remained the only country in the world to ban tobacco sales amid the pandemic.

“It appears hard to justify a ban that increases the threat of infection through sharing cigarettes, fuels illicit trade, and robs the Treasury of an average R35 million a day in ‘sin’ taxes. This lost excise would pay the cost of the huge new IMF loan in just 20 days. At a time when South Africans should be uniting against unprecedented adversity, they are being told that crime pays,” Abramjee said.

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