The big sin tax hike is another gift to criminals in illicit trade and another blow to legitimate tax-paying businesses and consumers. This was stated by the founder of (TJSA) Yusuf Abramjee on Wednesday after the Finance Minister Tito Mboweni’s budget speech.
Abramjee outlined that the black market in tobacco and alcohol that exploded as a result of lockdown restrictions is likely to soar further out of control.
“Minister Mboweni’s announcement is like a charter for criminals. Higher prices for legal products will only make illicit goods more attractive to consumers and the illegal players will simply grow even stronger. If your objective was to kill off legitimate companies and divert trade to tax-dodging criminals, this would be your business blueprint.”
He said that less tax will be collected and thousands of honest livelihoods will be lost in the wake of the excise increases.
“The sin tax hike is the worst possible news for hard-up South Africans, who are fed up seeing criminals get rich while their own families go hungry.
Abramjee indicated that the big sin tax hike means yet another payday for the organised crime syndicates.
“It means yet another payday for the organised crime syndicates that added alcohol and tobacco to their usual portfolio of hard drugs, protection and prostitution over the last year. Illegal networks that have flooded the market with smuggled and tax-evading products will become even deeper embedded in the market and the impact will take years to reverse,”
According to Abramjee the big sin tax hikes in alcohol and tobacco prices with immediate effect are over double the rate of inflation.
“Taxes lost by government as a result of the lockdown prohibitions add up to more than twice the amount it plans to spend on the vaccine roll-out. Now the same law-abiding industries affected by those bans are being targeted to bail out a government who have squandered so much money.”
