Press release – FITA – for immediate release
We note with concern the recent comments in the media attributed to one Francois van der
Merwe of the Tobacco Institute of Southern Africa, which organization primarily represents
the interests of 3 large foreign multinationals whilst masquerading as a champion for local
farmers, which farmers have long been exploited by foreign multinationals, and wish to reply
in connection thereto as follows:
The simple reality is that whilst illicit manufacturing and smuggling may be a common, and in
our view over-publicised malady in the industry, there are a multitude of other ills that affect
economic growth and losses to the fiscus that need to be addressed by the state.
We believe that a more holistic approach is required of the state to address losses to the
fiscus – of which illicit manufacturing and smuggling form but a part.
Quite clearly the practice of aggressive tax-base erosion and its devastating effects on our
economy in other economic sectors have drawn significant interest in the media recently with
a lot of rhetoric around so-called radical economic transformation dominating dialogue in
According to the South African Revenue Service the practice of aggressive tax-base erosion is
rife among multinationals in South Africa and leads to billions leaking out of our economy
annually. It is quite clear the significant unpaid taxes due to the fiscus resulting of such
practices exceed the monetary gains of small-fry smuggling operations.
For many years the public outcry from multinationals has been to vilify “smugglers” and
“manufacturers of illegal cigarettes”. It would make no sense for the state to exert all energy
towards smuggling & illicit manufacturing when large amounts are moved offshore and totally
We appeal to government and the relevant fiscal authorities to increase their efforts in the
tobacco industry by extending their scope towards dealing with such practices. As small and
mostly locally owned and based operations, such practices cannot be attributed to us.
We agree with only a small segment of the comments attributed to van der Merwe wherein
he states that “If the State Capture people at SARS and the police are taken out and you have
new heads in place, we will see criminal manufacturers closed down.” In this regard, the
history of one of the members of his organization, British American Tobacco, and their
capture of the South African Revenue Service is well documented, and an internal
investigation was in fact commissioned by British American Tobacco some 2 years ago, the
outcome of which is yet to be made public despite the seriousness of some of the alleged
offences, which offences we argue are of national interest as they not only implicate British
American Tobacco officials, but also implicate high ranking officials of various state organs.
We have, due to the fact that the primary targets of the practices alleged to have been
perpetrated by inter alia officials of British American Tobacco are members of our
organisation, written to British American Tobacco regarding the outcomes of their
investigation, but we are yet to receive any form of reply to our letters.
We therefore have to ask again who the real threat to the national fiscus is?
Issued by the Fair-trade Independent Tobacco Association: 2 February 2018
For queries kindly contact Monique Vogel t: 011 044 5355; e: Monique@fita.co.za