Africa losing $40bn in illegal cigarette trade

June 15, 2015 — Leave a comment

ContrabandA tobacco body has urged African governments to stamp out illegal tobacco trade, as their economies are losing billions of dollars in taxes annually. Tobacco Institute of Southern Africa (TISA) revealed that governments in the region are losing between US$20 billion and US$40 billion annually in taxes as a result of illegal tobacco trade, hence the need for collaboration among stakeholders to curb the vice.

This is contained in a statement issued by KPR Consulting Limited on Friday. “The size of the global illegal tobacco trade ranges between 330 and 660 billion cigarettes a year. These are cigarettes that are either smuggled, counterfeited or where tax is being evaded. “This equates to around six and 12 percent of global consumption, which deprives governments of between US$20 [billion] and US$40 billion a year in taxes,” the statement reads.

TISA, which is a regional body that represents tobacco traders, growers and processors, estimates illicit tobacco trade incidences in Zambia being between 20 and 30 percent. South Africa is rated among the top five countries globally when it comes to the trade in illegal cigarettes, with industry research estimating that around 23 percent of all cigarettes consumed in South Africa in 2014 were illegal. Commenting on the issue, British American Tobacco Zambia managing director Clara Mlambo cited weak penalties for criminals, poor border controls, low arrest rates and tobacco taxes creating intra-regional disparities as contributing factors.

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