South Africa has become the first country in the world with an illegal cigarette brand as a top seller! Illegal cigarettes are preferred for their low prices in South Africa, with the cigarette brand RG retailing at the lowest price of 10 Rand. RG has overtaken all legal brands including the preffered cigarette brand in the country Peter Stuyvesant, giving South Africa the dubious honor of being the first country in the world with an illegal cigarette brand as its top seller.
Illegal cigarettes are favored for their low price, with RG selling for, on average, R10. The South African Revenue Service (Sars) is meant to earn R17.85 from every box of cigarette sold in South Africa, meaning any brand sold for less than that amount is clearly not paying taxes, making it illegal according to a 2015 judgment. In just 3 months, the cigarette brand has rapidly grown to now occupy 42% of the market. Authorities have come under pressure to clamp down on the allegedly tax-dodging manufacturers of illicit cigarettes. Just last week, the Lesotho Revenue Authority confiscated 380 000 RG loose straws at the Maseru Bridge border post.
This was one of the biggest busts in Lesotho in the last five years. RG is allegedly smuggled from Lesotho to South Africa.
Interestingly , Gold Leaf Tobacco, manufacturer of RG, said Sars had never had to act against their brand because it was above board.
“Our RG brand is registered with Sars and there is nothing illicit about it,” said attorney Raees Saint.“We have been constant contributors to the fiscus. We have, in the last 12 years, paid an amount of nearly R8.2bn in excise duties alone.”
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