Sars issues tender to prevent illicit cigarette trade

The tax agency said this "track-and-trace marker technology" would help it monitor the illicit tobacco trade, which is causing "significant losses" to the national fiscus. (Delwyn Verasamy/M&G)

The tax agency said this "track-and-trace marker technology" would help it monitor the illicit tobacco trade, which is causing "significant losses" to the national fiscus. (Delwyn Verasamy/M&G)

The South African Revenue Service (Sars) is seeking a service provider to help it keep tabs on the illicit tobacco trade by tracking cigarettes from manufacturing plants to points of sale.

The tax agency said this “track-and-trace marker technology” would help it monitor the illicit tobacco trade, which is causing “significant losses” to the national fiscus.

“This non-intrusive technological innovation is expected to boost the monitoring and control of duties and taxes in this industry significantly,” Sars said in a statement on Tuesday.

A tender document has been published on the Sars website for “production management” for the track-and-trace solution.

According to the request for proposal, cigarette manufacturers must “implement the solution on the production lines [at] production facilities, locally and abroad, for those cigarette products that it produces, imports, markets and sells in the South African economy.”

The deadline is June 20.

Illicit cigarette manufacturing

The tax agency has been working to beef up its fight against the illicit cigarette trade since Mark Kingon took over as acting commissioner from Tom Moyane, who was suspended and later fired in 2018. Under Kingon, the agency revised a unit probing the illicit economy. The unit was one of several shut down under the now-infamous business restructure model ordered by Moyane.

Earlier this year, the tax agency obtained a warrant of execution in the Pretoria high court against controversial businessman Adriano Mazzotti, of tobacco company Carnilinx.

The Competition Commission, meanwhile, is probing the removal of certain brands of cigarettes form the shelves of Spar. According to the Sunday Times newspaper a senior Spar manager wrote in two internal emails that shops should not stock certain brands that have been linked by a study to tax avoidance. — Fin24

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