REEP plays a significant role in the NGO community, by making an impact on policy. Each year the Portfolio Committee on Finance holds (online) public engagements about aspects of the tax legislation. We usually submit letters to the relevant stakeholders, where we comment on their proposals and where we highlight some of our recent research findings. Below are links to some of these letters.

  • 31 March 2024. Letter to National Treasury. Comments on Draft Rates and Monetary Amounts Bill, which amend rates of duty in Schedule 1 in the Customs and Excise Act, 1964. (Vellios, N, van Walbeek, C.)

  • 17 September 2023. Letter to Members of the Finance Standing Committee. Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill: Specifically, Schedule II Part I (Section 7): amendment of part 2A of schedule No.1 to Customs and Excise Act, 1964. (van Walbeek, C, and Vellios, N.)

  • 3 August 2023. Comments on Tobacco Products and Electronic Delivery Systems Control Bill. (van Walbeek, C, Chisha, Z, Sam, F, and Vellios, N.)

  • 31 August 2022. Letter to National Treasury Comments on tobacco excise taxes and the illicit cigarette trade.

  • 29 August 2022. Response to National Treasury’s proposal on the taxation of electronic nicotine and non-nicotine delivery systems. (Van Walbeek, C, Ross, H, Vellios, N, and Chisha, Z.)

  • 1 March 2021. Letter to the Standing and the Select Committees of Finance. Comments on the tobacco excise tax increases in the 24 February 2021 Budget speech.

  • 23 November 2020. Letter to The Select Committee of Finance. Comments about the Rates and Monetary Amounts and Amendment of Revenue Laws Bill (2020).

Background

We typically provide an overview of the past few years’ excise tax changes in South Africa, changes in excise tax revenue, and legal consumption. We note the fact that the excise tax increase does no more than keep up with the inflation rate; we are of the opinion that it should be increasing by a much greater percentage. We also provide our latest estimates of the illicit trade (if available) and encourage the government to ratify the Protocol to Eliminate Illicit Trade in Tobacco Products and implement its provisions, specifically the provision to implement a track and trace system independent of the tobacco industry. Sadly, to date, South Africa has not ratified the Protocol.

We aim to act as independent “voices of reason”, and although our advice and suggestions might not be implemented by the National Treasury, our voice is a counterbalance to the tobacco industry’s claims and arguments. Our research, supported by a very large literature, shows that the illicit cigarette trade is, first and foremost, a criminal problem that needs to be solved through the enforcement and criminal justice system, and by the adoption of a secure and independent tax stamp technology like track-and-trace. Illicit trade is not, primarily, the result of higher taxes and the tax system does not affect it. This said, the effectiveness of the tax system can be undermined by illicit trade. Our arguments have been accepted by the National Treasury (see here and here).