As Finance Minister Tito Mboweni is set to table his budget this week, the recently-launched Black Tobacco Farmers Association (BTFA) calls for government to keep excise taxes at their current level.
The call to action is inspired by the current incapacity by the SA Revenue Service (SARS) to effectively tackle the illicit trade of cigarettes in order to protect farmers from a threat of job losses.
Illicit trade, as well as an impending threat to increase excise taxes yet again, poses a risk to the entire tobacco value chain, especially emerging farmer programmes that have developed small scale tobacco farmers and improved their livelihoods.
Said BTFA Chairperson Ntando Sibisi: “We just want to add our voice and request the Minister ahead of him tabling his budget that we would like to see a SARS that will take tackling the illicit trade of cigarettes more seriously before excise taxes are increased further.
“At this stage, more excise duties will do nothing but cause the illicit economy to grow even more. Under the current economic conditions, an excise increase will force more consumers to go for cheaper non-tax paying cigarettes.
“Illicit trade is partly caused by high excise taxes and is killing any progress that we have made over the years to create jobs and maintain jobs that have uplifted our communities. The future of tobacco farming, which provides a sustainable income for thousands of families, rests upon whether our concerns are taken seriously.”
The illicit cigarette trade places more that 10 000 jobs at risk and deprives South African taxpayers of R25m in lost taxes daily. Sibisi pleaded with government to preserve the livelihoods of emerging farmers. “We call on law enforcement agencies to act and actually clamp down on illicit cigarette trade and hope that this will be reflected in the Budget,” asserted Sibisi.
As demand to the sector is in rapid decline, the BTFA’s main objectives include protecting and prioritising the interests of Emerging Black Tobacco Farmers and ensuring their continued development and sustainability.