Over a million illegal cigarettes were destroyed at Cato Ridge on Wednesday, the South African Revenue Service (SARS) said in a statement.
The illegal cigarettes were seized over a period of four months this year and have an estimated market value of R720 000.
The action by SARS forms part of an ongoing enforcement campaign to create awareness among consumers and businesses about the trade in illicit goods and the effect it has on the economy.
Representatives from the tobacco industry have been cooperating with SARS anti-smuggling and enforcement teams in identifying illegal trade and the retail networks of these products.
The most common examples of cigarette smuggling SARS has uncovered include the transportation in containers and trucks with false compartments at border posts and warehouses as well as cross-border smuggling.
The amount of contraband cigarettes found in the South African market serves as an indication that smuggling into the country is increasing.
The SARS anti-smuggling officials have confiscated close to 18-million cigarettes since April 2005. The value of these goods is estimated at between R12-million and R13-million.
SARS estimated that cigarette smuggling cost the South African Treasury an estimated R466-million in lost excise and customs duties and VAT charges between 2002 and 2004.
Of particular concern to SARS are incidents of “round tripping” where locally manufactured cigarettes are exported and exempted from duties and taxes. These goods then find their way back into South Africa.
“Ghost exports” were also uncovered by SARS where empty containers or containers with other goods are exported to neighbouring countries and re-enter the domestic market with tobacco products for which duties and taxes have not been paid.
Unrecorded foreign transactions in South Africa’s balance of payments data were once again above the R10-billion level in the second quarter of 2005 and were a R10,409-billion inflow compared with a R12,555-billion outflow in the first quarter.
The large amount of unrecorded transactions was despite the introduction of a new reporting form in April 2001 after the SARB had then-record unrecorded transactions of R14,275-billion in the fourth quarter of 2000. – I-Net Bridge