R10 illegal cigarette pack becomes SA’s top seller

Nov 28th, 2018 Sandisiwe Ntlemeza 43 Views

JOHANNESBURG: Research house Ipsos said on Tuesday that South Africa has become the first country in the world to allow an illegal cigarette brand to become a top seller, after Gold Leaf Tobacco’s RG brand became the top-selling brand in the country overall, overtaking all legal brands.

Ipsos’ latest tobacco market study shows the trade in illegal cigarettes has increased dramatically despite promises of a crackdown from the South African Revenue Service (Sars).

Cigarettes selling for less than the tax of R17.85 per pack owed to Sars have grown market share by over 25 percent, from 33 percent to 42 percent in the informal market, in just three months.

RG cigarettes sell for an average price of just R10 and are therefore evading the R17.85 owed to Sars on each pack. A 2015 judgment found that cigarettes that are sold below the minimum tax can be deemed as illicit.