Rants and Cents: Sin taxes trigger black market activity

by Lindsey Francy Jun 4, 2023 News
Rants and Cents: Sin taxes trigger black market activity

The government's ill-conceived ban on cigarettes during the Covid-19 lockdown allowed the black market for tobacco products to explode, according to experts.

A customer smokes an e-cigarette at Vape store. File picture: Nam Y Huh

The sin tax on e-liquids went into effect on June 1 and doubled the retail price. The tax is being charged at a rate of R 347 per bottle.

This is the first time I have ever heard of a tax being imposed on a product that isn't legally recognised. Even before the Tobacco Products and Electronic Delivery Systems Control Bill is passed into law, the sin tax on vaping products is going to take effect.

That appears to be the least of the issues.

The government's ill-advised ban on cigarettes in 2020 caused the black market for tobacco products to explode. I don't know of anyone who quit smoking during the no-zol policy. I'm a smoker as well.

The tobacco ban was imposed by the minister of co-operative governance and traditional affairs.

Batsa requested clarity on the decision-making process that led to the tobacco ban. After the tobacco ban was repealed in August 2020, Batsa's court action against the Cogta minister was put on hold.

The tobacco ban was found to be unconstitutional after the judgement was handed down.

The tobacco ban had no effect on health.

The ban on the sale of tobacco products was lifted in August 2020.

Criminals have flooded South Africa's retail market with illegal tobacco, according to Batsa research.

The government was warned that the ban would increase the trade in tobacco products. It probably won't now because it didn't hear. An extreme example of how dramatic the revenue losses could be was provided after it was shown that the trade reduces government revenue.

The government lost around R6 billion in excise duties on cigarette sales during the 20-week sales ban. Tobacco companies produced and sold cigarettes during the sales ban. There were no excise taxes paid.

The banks of bureaucracy will bleed because of the rampant trade in tobacco and related products. It is estimated that the world's largest black market for cigarettes is South Africa. It won't be hard to get people to use e-liquid.

Despite recent steps taken by the government, this is still happening. The number of successful cases against serious organised crime was increased and revenue from criminal and illegal economic activities was recovered.

According to a recent report, Transnational Alliance to Combat Illicit Trade, Organised Crime, Corruption, and Illicit Trade: Spotlight on South Africa, which was recently published by Business Unity South Africa, it was not close to enough to address the growing problem. There is a chance that the new tax on Vaping products will cause more people to drive to illegal products.

The founder of Vaping Saved My Life said that the tax will wipe out a lot of small businesses and that it is promoting a black market for vaping products.

The government made a mistake by lumping vaping products into the same category as tobacco products.

He said that many people took up Vaping as a way of quitting smoking.

On May 31, the World Health Organization celebrated World No Tobacco Day.

According to the WHO, the tobacco epidemic is one of the biggest public health challenges the world has ever faced.

The number of people using tobacco products is increasing in Africa. The number of tobacco users in the WHO African Region increased from 64 million in 2000 to 73 million in 2018? Aggressive marketing by the tobacco industry is one of the reasons for this.

The problem has worsened because of bureaucracy. Being seen as having the right intentions is more important than the outcome of the act in local politics.

Personal finances.