The Fair-trade Independent Tobacco Association (FITA) said in a statement on Thursday that it has noted and is unsurprised at the Tobacco Institute of Southern Africa’s (TISA) announcement that it would “wind up its resources” to tackle the illicit tobacco and cigarette trade.
TISA, described by FITA as “an organisation which represented primarily foreign interests”, has reportedly been pressured by numerous sources, including FITA, after being implicated in allegations of corruption, money-laundering, tax evasion, unfair trade practices and undue influence over law enforcement officials, according to the statement.
These allegations are due to TISA’s affiliation with ‘Big Tobacco’, namely British American Tobacco South Africa (BATSA), Phillip Morris International, and Japan Tobacco International.
They were revealed in an Ipsos report released in 2018, which attributed the loss of R7 billion to the fiscus through the illicit tobacco and cigarette trade.
In the report, TISA said the ‘legal’ tobacco industry was worth over R16 billion to government.
It also exposed the explosion of the illegal trade after then-Sars commissioner, Tom Moyane, ordered that investigations and inspections of cigarette factories be stopped in 2015.
This, coupled with BATSA’s disinformation campaign that initially created conditions for illicit tobacco trade products to succeed, resulted in the multi-billion Rand loss suffered.
FITA said that it consistently cautioned the public, government, authorities and the media not to take any results in the reports as being credible. The Ipsos report and the #TakeBackTheTax campaign was, according to FITA, designed with the intention of ‘targeting’ FITA members, witch they said was to secure front-page headlines and influence the media.
“It is therefore pleasing to our organisation, as representative of the smaller local manufacturers, and for many years the targets of Big Tobacco, that these strategies were rejected and not given any credence by the public at large,” FITA said.
It added that TISA’s commitment to ramp up resources showed that “the narrative that was being bandied about for decades by Big Tobacco was now well past its expiry date,” and that this meant the public no longer needed to feel as though it must rely on any research or data put forward by Big Tobacco.
However, the statement lamented that Thursday’s announcement would probably not deter Big Tobacco from continuing to “influence policy-making bodies and law enforcement agencies as it has done historically worldwide”.
On the plus side, however, FITA said its confidence in respective state institutions and the reluctance to accept studies conducted on the industry by Big Tobacco has been restored. FITA maintains that Big Tobacco’s research and data are only designed to commercially benefit multinationals.
One example of authorities taking charge was Finance Minister, Tito Mboweni’s announcement that Sars will be commissioning its own research into the scale of the illicit trade, and will inform the media and authorities accordingly.
FITA cautioned that when trying to ascertain the fiscal risks to the country’s economy regarding the tobacco trade, the entire sector should be considered, “across all tax types and along the value chain.”
It welcomed a status quo shift that no longer accommodates Big Tobacco “dictating” public perception.
“We also urge the media and the public to continue to demand answers in relation to their past misdemeanours from these large corporations, which corporations continue to yield a significant amount of power and influence,” FITA’s statement concluded.