Cape Town – The South African Revenue Service (SARS) has been lax in efforts to clamp down on the illicit tobacco trade, but its acting commissioner Mark Kingon is resolute in changing this, Parliament heard on Wednesday.
Officials from the tax authority briefed the standing committee on finance about their efforts to fight the illicit tobacco trade.
“At the outset we need to acknowledge that we have not done enough in the past two to three years. More needs to be done in the field,” said group executive for customs compliance risk and case selection William Mpye.
“The acting commissioner [Mark Kingon] alluded to the fact SARS will raise efforts to make sure the issue is dealt with better, going forward.”
Earlier at the hearing, chairperson of the Tobacco Institute of South Africa Francois van der Merwe said it appeared that SARS had done nothing to curb illicit trade. “It was a time for illicit traders to make money.”
In fact, Project Honey Badger - meant to investigate illicit trade - was stopped, Van der Merwe claimed. He said the industry body had established a partnership with SARS as far back as 2005, and that late last year it was working to rebuild that relationship.
Mpye agreed that stakeholder engagement has “ground to a halt”, but said SARS is making an effort to engage again.
He highlighted that the tax authority has been working on the matter. Since the 2014/15 year to 2017/18, SARS has conducted 1 368 seizure operations, where 270 million cigarette sticks to the value of R217m were collected.
SARS customs investigations executive Patrick Moeng addressed questions about Project Honey Badger and said it was "not abandoned”.
SARS continues to clamp down on illicit trade, not just in the tobacco industry but in clothing and textiles, construction and high net worth individuals as well, he explained.
“It is not as if we are awaking from a slumber. We have always put our finger on illicit trade,” he said.
He agreed that SARS could increase efforts to work with other government departments to stop illicit trade in the industry.
