Fake fish-style fake food – illicit goods cost sa billions

Without unpaid taxes and increased illicit trade in the country, more than 12 billion rand could have been allocated to education, 6.5 billion rand to health care and 6.5 billion rand to community development in the past five months.

This is what Tax Justice South Africa reports, which – along with the South African Revenue Service and the Consumer Goods Council – spoke to the media on Monday morning to highlight the impact of the illicit trade. The organization says that according to its calculation, 36.5 billion rand has been lost due to illicit trade and unpaid taxes since October of last year.

In other words, according to this estimate, the billions lost during this period could have covered one year of budgeted cost for free higher education; keep more than 30,000 patients in intensive care for one week, based on an estimated cost of around 30,000 rand a day; or build the walls that Prasa believes will eliminate vandalism.

SARS, for its part, has said that the illicit economy costs SA about 100 billion rand a year.

The press conference, said Tax Justice SA founder Yusuf Abramjee, aimed to discuss ways to promote tax compliance.

“Illicit trade deprives us of the ability to build a better South Africa for all. We are not trying to tell the Minister [of finance Tito Mboweni] where to spend his money, but we are telling him where he can go and find more money in these difficult times, "said Abramjee.

Other speakers noted that the illicit trade has affected several sectors, from textiles to fake food and even fake medicines, which could be life-threatening.

Fake food, fake medicine

Consumer Goods Council of SA CEO Gwarega Mangozhe said that bogus foods are becoming more and more popular.

"One of the things we found was that illegal trade and counterfeiting were starting to pose a significant risk for economic audit in South Africa, but the other problem that this poses too is the risk to the health of consumers.

"We are starting to see an increase in food fraud. You are going to eat a product claiming to be the product of the original brand owner and which can actually jeopardize your health," he said.

In order to fight food fraud, the CGCSA collaborated with various organizations such as SAPS to stop the unions in their footsteps. The main products under surveillance will be tobacco, alcohol, food, clothing and pharmaceuticals, which are also counterfeit.

Defective mode

SARS chief customs and excise officer Beyers Theron, who was one of the speakers, made particular reference to the clothing and textile industry.

"If you look at the international figures which show the extent of the problem of illicit trade, around 650 billion dollars can be attributed to illicit goods, which represents around 7% of all goods which circulate in the world and end up in informal markets, which are not necessarily regulated as they should be.

"In South Africa, SARS seized goods worth 2.1 billion rand in the past year to January in the normal industry" said Theron.

Although Mboweni announced a sin tax increase of between 4.4% and 7.5% in his budget speech last week, illicit traders will not bear the brunt.

Theron added that unethical product evaluation in the textile industry threatens jobs and income in the country as several companies are forced to close. According to Theron, reputable retailers also play a role in the illegal revaluation of clothing in order to benefit from it.

"We have found incidents where clothes are declared at 0.02 cents US; in South Africa, it's 30c for a garment. If you take the manufacturing entry cost for a garment, it there is absolutely no way for anyone to declare this type of value. " "

Theron says the textile industry would see a drop in revenue for February given the suspension of shipping of goods to the country following the coronavirus epidemic.