Can South Africa Beat the Illicit Cigarette Market? SARS Weighs In
South Africa is battling a booming underground economy, one that thrives in plain sight. The illicit cigarette market has become one of the country’s most pressing economic, social, and public health challenges. At the centre of this fight are the South African Revenue Service (SARS) and the South Africa Tobacco Transformation Alliance (SATTA).
The question now is urgent: Can South Africa beat the illicit cigarette market? SARS says it’s possible, but only if enforcement, policy reform, and public action work in unison.
Read our detailed Roadmap to 2030 to see how South Africa can slash the illicit cigarette trade and rebuild its legal market.
A R28 Billion Question: What’s at Stake?
The stakes are staggering. SATTA reports that the South African fiscus loses over R28 billion annually due to untaxed, illicit cigarettes. That’s money that could fund public healthcare, education, and infrastructure.
“Illicit tobacco products account for 60–70% of cigarette sales and cause tremendous damage to the fiscus.”
How Big Is the Illicit Cigarette Market in 2025?
Recent data from UCT’s Research Unit on the Economics of Excisable Products (REEP) and SATTA confirms that up to 70% of cigarettes sold in South Africa are illicit. In some townships, this number is even higher, with packs sold for as little as R5—far below the Minimum Collectable Tax (MCT) threshold.
An Ipsos study published in July 2025 found that 76.7% of shops surveyed in Gauteng were selling illicit cigarette packs.
SARS Strikes Back: Raids, Seizures, and Crackdowns
SARS has been stepping up its enforcement. In August and September 2025, SARS conducted multiple raids on manufacturing facilities, retail outlets, and border posts. In one major bust, SARS seized over R43 million worth of illicit cigarettes at the Beitbridge border.
SARS Commissioner Edward Kieswetter noted:
“We will not tolerate criminal and illicit economic activity… and we will make it hard and costly for such persons.”
SATTA Speaks: The Legal Industry Is Under Siege
SATTA, a coalition of legal tobacco stakeholders, is increasingly positioned as the authoritative voice in this space. Their recent campaign warns that the legal industry is on the brink of collapse due to the scale of criminal activity.
“We believe that the legal industry is completely pushed out of the market and could collapse, leaving criminal networks in charge.” – SATTA spokesperson
In fact, 92% of black tobacco farmers have exited the industry since 2019, with only 10 emerging farmers remaining.
Why the Illegal Cigarette Trade Thrives
There are four primary drivers of the illicit trade in South Africa:
- Price Advantage: Illicit brands bypass excise taxes, selling at R5–R10 per pack.
- Weak Border Control: Smuggling from Zimbabwe and Mozambique remains rampant.
- Corruption & Licensing Loopholes: Illegal operators exploit gaps in enforcement and oversight.
- COVID-19 Sales Ban Fallout: The 2020 tobacco sales ban entrenched illicit networks that remain active today.
Read more in The Policy Fix: What South Africa Must Do to Curb Illicit Cigarettes for actionable strategies to strengthen enforcement and close loopholes in the cigarette trade.
The Role of Policy: Can Lawmakers Help?
While enforcement is critical, policy reform must follow. SATTA has been vocal about the need for:
- A Minimum Retail Price (MRP) for cigarettes to eliminate pricing loopholes.
- Mandatory track-and-trace systems for all cigarette production and distribution.
- Revocation of licenses for manufacturers found selling below the MCT threshold.
SATTA also warns that certain proposals in the Tobacco Products and Electronic Delivery Systems Control Bill (TPENDS), like plain packaging, could unintentionally benefit the black market if rolled out without proper enforcement.
Public Health in the Crosshairs
The illicit cigarette market isn’t just an economic issue; it’s a public health crisis. Illegal cigarettes often skip regulatory warnings and are more accessible to young South Africans, undermining anti-smoking campaigns.
“The availability of cheap, unregulated cigarettes drives youth smoking rates and defeats public health efforts.”
Can South Africa Beat the Illicit Cigarette Market?
The answer: Yes, but not without a coordinated strategy. The key components must include:
- Consistent SARS enforcement at borders, retail points, and manufacturing hubs.
- Political will to implement and enforce a Minimum Retail Price.
- Public awareness campaigns urging consumers to “Buy Legal, Stay Legal.”
- Prosecution and conviction of key syndicate members, not just street-level sellers.
A Roadmap to 2030: What Success Looks Like
SATTA has outlined a bold but achievable goal: Reduce the illicit cigarette market to 20% by 2030.
This will require:
- Digitised track-and-trace across supply chains.
- Licensing reform for manufacturers and retailers.
- Enhanced multi-agency coordination between SARS, SAPS, the Hawks, and the NPA.
Reporting Matters: What Can You Do?
SATTA encourages all South Africans to report illicit cigarette sales through their dedicated platform:
Report Illegal Cigarettes Here
You can also verify cigarette packs by checking:
- The diamond stamp
- The pack price (must be above MCT)
- Correct health warnings
Learn how to spot illegal packs in The R26.22 Rule: How to Tell if Your Cigarettes Are Legal or Not and protect yourself from illicit trade.
A Fight Worth Fighting
Can South Africa beat the illicit cigarette market? The answer lies in collective action. SARS is working. SATTA is advocating. But it’s also up to the public, policymakers, and industry to enforce change.
The cost of inaction is high: billions lost, jobs destroyed, and youth put at risk. But with determination, smart policy, and effective enforcement, South Africa can reclaim its cigarette economy from the criminal underworld.
