Sars clamps down on illegal cigarettes, destroys R17m worth of product

Despite successes in combating illicit trade, the time has come to become smarter and more efficient, the South African Revenue Service says. It said it was for this reason that it had implemented the Sars Vision 2024 programme of action to address illicit trade, with minimal resources and budgetary constraints. Director of customs border operations, ports of entry and customs compliance Beyers Theron said the programme would focus on achieving higher levels of automation and data-driven operations.

This would result in customs featuring smart borders that included 100% screening capabilities through pre-border automated processes, in-line scanning technologies and seals with radiofrequency or satellite tracking abilities. It would ultimately ensure a centrally controlled arrival and exit management of border processes.

Theron said Sars hoped it would fit into a broader customs modernisation programme that included single Window systems to support collaboration between agencies, improved licensing and registration systems. It would also create an authorised economic operator scheme that would benefit legitimate trade and systems that control advanced import payments.

Theron was speaking at the destruction of part of 2 000 master boxes of illicit cigarettes, with an estimated value of R17.4 million, at Sars headquarters in Brooklyn yesterday. He said illicit cigarettes predominately made their way into the country through outright smuggling, ghost exports and round-tripping, under-invoicing, abuse of duty-free import concessions and misdeclaration, among others.

Other sectors hard hit by the illicit market, and which Sars is prioritising, include clothing and textiles, leather and footwear, fuel, poultry, second-hand vehicles, gold and scrap metal. Theron, however, said what was clear was that the trade of illicit goods was lucrative, well-organised, had a massive reach geographically, and involved a large number of people. He said this indicated that illicit trade was closely linked to other forms of organised crime, including drug smuggling, gun-running and human trafficking.

“Sars, together with (other) administrations, will not succeed in building a conducive environment for a legitimate business to thrive whilst also clamping down on illegal activities unless they form effective partnerships with key role players. We trust today’s destruction will give you some insight into our efforts and an indication of our zero-tolerance stance towards con-compliance in the tobacco and cigarette industry,” said Theron.

Theron said the hammer mill that was used in yesterday’s destruction demonstration was one of three in Sars’s Gauteng, Limpopo and KwaZulu-Natal state warehouses. They were used to expedite a cost-effective and faster disposal process for seized cigarettes. He said the immediate destruction also formed part of the intensified focus to address illicit trade in cigarettes and address instances where criminals working together with some officials targeted their warehouses.

Cassius Sinthumule, an executive for the air modality cluster, said the introduction of the mobile shredder was a great move as it enabled them to have real-time destruction of goods, meaning that once all the internal processes were completed they could dispose of the illicit goods on the spot. He said that was important when one looked at the demand based on the risk of the illicit economy, as they had to make sure to build their capacity in order to respond promptly and efficiently.

 

 

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