Cyril Ramaphosa’s failed crackdown: 92.4% of vendors in South Africa’s informal sector sell illicit cigarettes for as low as R7 per packet

President Cyril Ramaphosa promised to disrupt the illicit economy, but the availability of illicit cigarettes across South Africa shows that this was another empty promise.

In his 2026 State of the Nation Address (SONA), Ramaphosa announced the creation of the National Illicit Economy Disruption Programme.

“We are establishing an illicit economy disruption programme that brings together key state agencies and other stakeholders, including the private sector,” he said.

“Through effective use of data analytics and AI, we will target high-risk sectors such as tobacco, fuel, alcohol, and other counterfeit products.”

This marked a shift toward treating the counterfeit trade and organised illegal markets as national security and economic issues rather than just routine crime.

However, as with many other things Ramaphosa has promised over the years, not much has happened since he made this promise.

Tax Justice SA founder Yusuf Abramjee said that this supposed crackdown has failed to trouble the criminal tobacco kingpins.

“These kingpins continue to loot South Africa of more than R30 billion a year, according to new research,” he said.

An Ipsos survey found that 74.5% of stores nationwide are still selling cigarettes at prices that show due taxes have not been paid.

92.4% of vendors in the informal sector sell a packet of 20 cigarettes at or below the Minimum Collectable Tax (MCT) level of R27.12.

85.5% of wholesale outlets sell packs below this tax. Researchers found cigarettes selling for as little as R7 a pack, almost 75% below the minimum tax.

Almost two-thirds of sampled outlets sold packs for R20 or less, with hotbeds in the Northern Cape and Western Cape.

Government promises versus the reality on the ground

Abramjee said that the research findings expose the gulf between Government promises and what is happening on the ground.

“Researchers could walk into three out of four outlets and buy cigarettes at prices that leave nothing for manufacturing, transport or profit once the tax is paid,” he said.

“Wholesale availability has barely budged. The supply pipeline feeding this criminal trade remains wide open.”

“It continues to cost the country more than R30 billion in lost tax revenue annually. We need proper enforcement, not empty words.”

Abramjee added that the survey showed that the availability of illicit cigarettes has almost tripled from 27% in 2022.

Gold Leaf Tobacco Corporation (GLTC), which was renamed Polaris Manufacturing and operates out of Johannesburg and Harare, dominates this market.

In March 2023, Al Jazeera’s Gold Mafia documentary exposed its involvement in alleged smuggling and money-laundering on a massive scale.

“Although Gold Leaf faces a R3 billion tax claim from SARS, its brands were the cheapest available in 40% of the stores visited,” Abramjee said.

He added that three-quarters of Polaris Manufacturing’s cigarette brands sold below R20 per pack in South Africa.

Another prominent manufacturer in the survey was Carnilinx, a principal member of the Fair Trade Independent Tobacco Association (FITA).

“More than nine out of 10 Carnilinx cigarette brands purchased were sold at illicit prices,” Abramjee said.

“These cigarettes are readily available to ordinary shoppers. Authorities must follow the products and the money through wholesalers, distributors, factories and importers.”

Abramjee has backed calls from compliant manufacturers for a minimum price for cigarettes to assist the detection and prosecution of tax evaders.