Illicit/cheap cigarettes in South Africa

Using wave 5 of the National Income Dynamics Study (conducted in 2017), this paper investigates the market for very low-priced cigarettes in South Africa, which, in all probability, are illicit. Since the sum of the excise tax and VAT in 2017 amounted to R16.30 (1.22 USD) per pack, any cigarettes se...

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Bibliographic Details
Authors: Van der Zee, Kirsten (Author) ; Walbeek, C. P. van (Author) ; Magadla, Sibahle (Author)
Format: Electronic Article
Language:English
Published: 22 November 2019
In: Trends in organized crime
Year: 2020, Volume: 23, Issue: 3, Pages: [242]-262
Online Access: Volltext (Resolving-System)
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Keywords:
Cigarette prices
Tobacco control
illicit trade
Tobacco Industry
Tax enforcement
Description
Summary:Using wave 5 of the National Income Dynamics Study (conducted in 2017), this paper investigates the market for very low-priced cigarettes in South Africa, which, in all probability, are illicit. Since the sum of the excise tax and VAT in 2017 amounted to R16.30 (1.22 USD) per pack, any cigarettes selling for R20 (1.50 USD) per pack or less are likely to be illicit, assuming reasonable production costs. By this definition, approximately 30% of cigarettes consumed in South Africa in 2017 were illicit. Illicit cigarettes are found across all nine provinces. At the margin, the purchase of illicit cigarettes is associated with lower socio-economic characteristics, such as having lower levels of income and education. As illicit cigarettes undermine both the fiscal and health agendas of tobacco taxation policy, these results highlight the need for the South African government to implement urgently effective measures in order to curb illicit trade.
Item Description:Literaturverzeichnis: Seite 260-262
Physical Description:Illustration
ISSN:1936-4830
DOI:10.1007/s12117-019-09372-9