The Tobacco Institute of Southern Africa (TISA) and the Ministry of Finance (MoF) has signed a Memorandum of Understanding (MoU) to strengthen the fight against illicit trade of tobacco products.
According to Tisa chief executive officer, Francois van der Merwe, this agreement will promote the existing relations between South Africa and Namibia and will go a long way to address issues of illegal tobacco trade in the region.
The current total cigarette market size of Namibia is estimated to be 350 million sticks of which 10% is estimated to be illicit.
According to Van der Merwe, Namibia is used as the transit country by corrupt traders to smuggle prohibited tobacco products into South Africa because of its vast borders.
He added that such illicit products often originate from countries such as Zimbabwe, Angola, Dubai and China with a great deal of these products sold on the Namibian market itself.
Van der Merwe further highlighted that Tisa estimates showed that such illegal cigarette trading has swindled the South African fiscus out of R12bn.
“This has a direct impact not only on South Africa but also the revenue sharing Sacu member states like Botswana, Lesotho, Namibia and Swaziland,” Van der Merwe related adding that Tisa works tirelessly around the clock to secure a more collaborative approach in combating illicit trade not only in South Africa, but across the southern African region.
This include recently concluded MoUs with Mozambique and other Sacu countries because illicit trade occurs within countries and across borders and, therefore, calls for a holistic approach within a legitimate framework to counter the growing tide of this practice.
“All stakeholders need to consider what fuels the illicit trade in tobacco products. For example, extreme regulations, such as plain packaging will make it difficult to differentiate between different tobacco products and will make counterfeiting easier, leading to a further rise in illicit trade.
“Higher excise taxes on tobacco products will also cause people to buy cheaper illegal cigarettes, which apart from defrauding governments of revenue, also defeats the health objectives of governments to reduce consumption,” he urged.
Van der Merwe further pointed out that the adoption of a global Anti Illicit Trade Protocol at the 5th Session of the Framework Convention of Tobacco Control (FCTC) in Korea during November 2012 has served as a great source of encouragement for TISA
“We firmly believe that this will go a long way in bringing together impacted stakeholders and we remain committed to working with all the relevant stakeholders in eliminating the illegal trade in tobacco products,” said van der Merwe.