The Congress of South African Trade Unions (COSATU) is deeply worried by the explosion in illicit tobacco, now estimated to be 75% of total sales, and the possible loss of 230 jobs with British American Tobacco (BATSA)’s proposed closure of its factory in Nigel. These are alarm bells which should concern all South Africans.
“Hardships often prepare ordinary people for an extraordinary destiny“
C.S. Lewis
We cannot afford to lose more jobs with an already dangerously high unemployment rate of 42.4%. We urge BATSA to engage labour and find alternative options besides sending workers to the unemployment queue.
The growth in the sale of illicit tobacco has been rising at exponential rates over the past few years, in particular since COVID-19’s temporary ban on sales. This rise has been fueled by illegal tobacco sales circumventing tax requirements and being sold on average at 25% of the price of legal products.
The massive growth in illicit tobacco threatens the jobs of workers at tobacco companies who abide by their legal requirements, including the sin tax regime. Cheaper tobacco will make smoking more affordable and attractive to smokers, in particular young people. The avoidance of the sin tax regime will fuel a rise in smoking and rob the state of money needed to fund public healthcare, including to treat patients with lung cancer caused by smoking.
COSATU, the South African Revenue Service (SARS), health organisations and legally compliant traders have long been raising the alarm bells with Parliament and government about this dangerous crisis and the threats it poses to society, workers, businesses and the state.
Key interventions need to include Parliament, led by the African National Congress, expediting the passage of the progressive and bold Tobacco and Electronic Delivery Systems Bill as well as strengthening it to require 24/7 monitoring of all tobacco companies’ premises, including their warehouses, and the tracking and tracing of all tobacco related products.
SARS and the South African Police Service (SAPS) need to be given the necessary tools, including skilled personnel, to ramp up their efforts to crack down on illegal imports and sales. This needs to include door to door inspections of all tobacco related products sellers’ premises, the arrest and prosecution of those found to be involved in illegal sales and the confiscation and destruction of illegal products
For this war against the illicit tobacco trade to be won, there must also be a close partnership between SARS, SAPS, the National Prosecuting Authority and the State Security Agency, legally compliant tobacco businesses and farmers, as well as labour. This is a war that we cannot afford to lose.
Issued by COSATU.
