2019 Budget Speech: Illicit Economy Unit

The reports released in 2018 November indicates that 1 of 3 cigarettes sold in South Africa is illegal. The cost of illegal cigarette cost about R50-60 per carton while the legal cigarette sold locally in South Africa cost R250 per carton. Consumption of illegal tobacco keeps increasing and this is due to their selling price

It is estimated by the survey that up to 100 000 shops freely sell illicit cigarette brands nationally consume the illicit tobacco, the South African Revenue Services is losing billions of Rands in taxes due to this trade of illegal Cigarette. The minister of finance announced an increase of R1.14 on a packet of cigarettes and such increase ravages the South African Tobacco industry. The smokers are now turning to consume illegal cigarette due to constant increase in sin tax.

The South African minister of finance Tito Mboweni announced that they are in process of regaining Illicit Economy Unit, which was previously dissolved by the former SARS commissioner Tom Moyane. The Unit will also focus on Tobacco industry and if the Receiver of revenue employs highly skilled individual in the filled of illegal tobacco, we might regain the confidence of investors in Tobacco industry.

This is great news to people who are trading legally in the industry and it will also benefit the South Africa economy by ensuring all trade made in South Africa account to tax. Tobacco plays a big play big role in South African economy and the selling of illegal tobacco elapses South African economy. This unit will retain billions of Rands lost in taxes due to the sale of illegal tobacco.


Alex Mahundla
Process Assistant