100% Tax Increase on Tobacco Products Will Kill the Industry

CAPE TOWN – The South African Tobacco Transformation Alliance (SATTA) said Wednesday that a 100% increase in the tax on tobacco products would kill the industry.

Anti-smoking groups have called for an increase in excise taxes ahead of Finance Minister Tito Mboweni’s mid-term budget review speech.

The Congress of South African Trade Unions (Cosatu) also comes to support this call.

SATTA said the industry was bleeding as a result of the COVID-19 shutdown, which saw a ban on the sale of all tobacco products for months.

Spokesman Zachariah Motsumi said the industry was trying to rebound.

“We are not the only ones in the tobacco sector who have suffered. All members of the sector value chain organization, SATTA, including the Black Tobacco Producers Association, BAT South Africa, Limpopo Tobacco Processors and Tobacco Producers Development, suffered huge losses due to their compliance with the law.

“Our extended value chain partners, small merchants and spaza store owners felt the same impact, the vast majority of whom are black,” Motsumi said in a statement.

Motsumi said that prior to the shutdown, 127 emerging farmers were planting tobacco, but in the wake of the harsh shutdown, 17 had thrown in the towel.

“If drastic measures are not taken soon, the more than 150 dark tobacco farmers struggling to make a living in rural South Africa will soon go out of business. I myself am in the tobacco industry and interact regularly with farmers and other processors.

“And it is not a euphemism to say that our lives have been devastated by the economic consequences of the national pandemic, where the legal sale of cigarettes and other tobacco products was prohibited for almost five months,” he said.

He said job losses were looming, adding that more than 290,000 people depended on the tobacco industry for their livelihoods.

Download the EWN app on your iOS or Android device.