New minimum price for cigarettes proposed for South Africa

British American Tobacco SA (BATSA), one of South Africa’s largest tobacco companies, has called on the government to introduce a new minimum price for cigarettes in the country.

In a statement on Wednesday (10 November), BATSA said that a new floor price will help combat illegal suppliers and improve tax collection in the country.

A survey by market researchers Ipsos published on Tuesday found that two-thirds of stores in four hotspot provinces are selling cigarettes below the Minimum Collectible Tax (MCT) level of R21.60 per pack of 20.

The research shows that some of the cheapest packs of cigarettes that can be bought in South Africa currently, includes:

• Liberty – R18
• Ecco Nano – R18
• Roxbury – R10 and R15
• Chief – R10 to R18
• GMB – R10

“BATSA is calling for a minimum legal retail price for cigarettes of R28 per pack that would allow police to seize illegal cigarettes more effectively and give guidance to consumers to differentiate between legal and illegal products,” said BATSA general manager Johnny Moloto.

“SARS officials told MPs on Tuesday that the biggest problem is not smuggling, but illicit cigarettes being produced in this country. They know the problem, and they should know who is responsible. Instead of throwing up their hands in despair, they should follow the money and catch the criminals who are siphoning billions out of our beleaguered economy,” he said.

He added that production counter rules were instituted more than a year ago and this should mean all manufacturers are accountable for every cigarette they make. Yet SARS does not seem to be adequately enforcing their policy that would ensure these regulations are being followed, he said.

“SARS published draft CCTV camera rules for public comments two months ago. “We are calling on SARS to implement these rules as of January 2022 instead of June 2022 to strengthen the control of local production.”

Source: Business Tech