I’m a little obsessed with cigarette and tobacco taxes, for various reasons, which I’ve written about many times before. Well, the big reveal here: I do, in fact, smoke.
But honestly, that’s not why I’m so obsessed. I do, as I have mentioned before, support widely Oscar Wilde’s philosophy on smoking, which Lady Bracknell expounds in his play The Importance of Being Earnest. “Do you smoke?” asked Mrs. Bracknell bluntly.
Jack: Well, yeah, I have to admit I smoke.
Mrs. Bracknell: I’m glad to hear that. A man should always have some kind of occupation. There are as many idle men in London as it is.”
Times have passed, of course, and smoking is now dangerous to health. Governments around the world are determined to eradicate it. At first glance, it seems indisputable that this is a positive legislative goal. However, there is a limit to everything.
Without being too liberal about it, what are the standards for legitimate government interference in the private lives of citizens when there is no harm done to others? In general, the government has responsibilities, including providing infrastructure, defending its citizens in war, sanitation, protecting and educating young people, and ensuring that innocent people are not harmed by the actions of others.
In this sense, the government has a duty to restrict certain individual liberties. But when do you go away? When the government moves into our private space.
The thorny issue of the new smoking restrictions raises this issue. It sounds trivial, but behind it lies an important principle. You could argue that the government has the right to stop you from harming yourself if the result is a higher health bill for society as a whole. But what about a cheeseburger? A third of South Africans are technically obese, yet there are no health warnings on cheese. But there are guidelines for sugar use and calls for more.
The matter is relevant in SA at the moment because the Tobacco Products and Electronic Delivery Systems Act 2022 has been submitted for public comment, and I would like to endorse, for what it deserves, the Tax Justice SA (TJSA) comments on the issue. The bill imposes simple packaging requirements, display bans, outdoor no-smoking areas, and prison sentences starting at six months for smoking in the wrong place outdoors. 🤷🏼♀️ It will make it illegal for someone else to carry a cigarette in your car.
Doesn’t this present issues of efficacy and policing (I mean, really? SAPS need to enforce this on rape, robbery, and murder?) and all this while there is a global trend toward the liberal use of drugs, the prohibition of which has helped create a bloody, brutal underground from drug traffickers, just as prohibition has Selling alcohol during the Prohibition era in the United States.
TJSA founder, and SA’s general expert on crime, Yousef Ampromaji calls the bill a “fraud charter”. He writes, “If the leaders of the illegal cigarette trade were asked to formulate a plan to expand their highly destructive empires, the tobacco control bill is what it would look like.”
He claims the new tobacco law will give criminal tobacco lords total control of the South African cigarette market.
The reason he came to this conclusion is because, as we all remember, the sale of cigarettes was banned for a period during Covid, a ban that was later declared illegal. During this ban almost every smoker was able to buy cigarettes and the only winners were the illegal networks who were able to charge exorbitant prices.
As a result, Amproje says, today nearly three out of every four cigarettes sold in South Africa are illegal. “If the bill becomes law, almost every cigarette sold will be illegal and billions of rand in badly needed tax revenue will be lost.” (Because illegal cigarettes evade taxes, they cost about 60% less, which increases market share.)
State income statements indicate he is right. According to the government’s budget review, in 2020 the government collected just under R14 billion in taxes on tobacco products. This collapsed in 2021 to R7.5 billion in the wake of the Covid era ban. Then the government estimated that it would rebound to 13 billion rand in 2022. But guess what: it never happened. The government has raised just under R9 billion in 2022.
In 2024, the government is budgeting for tobacco product income of R11.6 billion. In other words, four years later, the government still expects to collect significantly less than it did in 2020. By comparison, the government collected R15 billion in taxes on beer in 2020, and collected just under R20 billion in taxes on beer in 2022. , and it expects to raise 21.5 billion rand in 2024, which is a straight line on the imaginary graph.
So either smoking is down 15% or so between 2021 and 2024 (believe me, that’s not what happened) or the illegal industry is making an absolute bomb. This raises an uncomfortable question: Is the government really trying to boost the illicit industry? Are we going to oversimplify credibility to suggest that money is being passed under the table here? Or is it just another example of grotesque legislative overreach?
Of course, both are possible, and I bet that eventually, the truth will come out. DM