South Africa's economy could lose up to $515.3 million a year due to the illegal cigarette trade, a TobaccoInstitute report indicated.

According to information relayed by Bloomberg, this situation is related to tax evasion as the government could not collect tax on illicit sales. Experts said some cigarette producers offer prices below the normal cost to avoid paying the $1.3 per pack of cigarettes sold.

Over 75% of these “low-cost cigarettes” are reportedly made by Gold Leaf Tobacco, which however denied the charges.

For the record, the country’s treasury has previously announced a revenue gap of more than $3.5 billion for the 2017-18 fiscal year and President Cyril Ramaphosa announced an investigation to improve the tax administration’s performance through a strengthening of means and activities. Let’s note that Ramaphosa’s main priority is to tackle corruption and tax evasion in South Africa.

Moutiou Adjibi Nourou