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South African Revenue Services Sees a Rise in Illicit Trading during Lockdown

South Africa’s hard Covid-19 lockdown on the back of a drooping economy is set to cost the public purse R285-bn in 2020. That loss, alongside a flourishing illicit economy focused on alcohol and cigarettes, were flagged as serious concerns on Tuesday in Parliament. In four instances, tax authorities and police are working together after the SARS investigations uncovered alcohol and tobacco smuggling. SARS discovered a cigarette factory with three machine lines in action, and while it was argued this was for export, the lockdown regulations do not permit such trade. In another case, SARS stopped trucks that purported to be carrying food only to find alcohol when the vehicles were searched. SARS Commissioner Edward Kieswetter’s hard numbers on revenue losses (and concerns about South Africa’s economic capacity and the flourishing illicit economy) such as National Treasury’s modelling of between three to seven million Covid-19 lockdown-related job losses stand in stark contrast to Trade and Industry Minister Ebrahim Patel’s assessment.