How pandemic fuelled illicit trade
A new report shows how Covid opened up new opportunities for illicit trade to flourish. According to SARS, illegal trade costs SA R100bn a year.
Business Leadership SA reckons the country loses R250m a day in tax revenues, while the Organisation for Economic Cooperation and Development estimates between $3.5bn and $5bn, more than 1% of GDP, is lost each year to illicit trade.
A new report, Organized Crime, Corruption and Illicit Trade: Spotlight on South Africa, details how the ban on the sale of alcohol and tobacco during the Covid lockdowns in 2020 allowed criminal networks to gain a foothold in the market that will take years to reverse.
Releasing the report on Tuesday, Transnational Alliance to Combat Illicit Trade senior policy adviser Esteban Giudici said high unemployment, rising inflation and widespread corruption, as well as the after-effects of the Covid lockdowns, had allowed illicit trade to proliferate.
By some estimates, the black market accounts for more than half the cigarettes sold in SA, robbing the fiscus of at least R20bn a year.
Moneyweb reports that it also found that Covid allowed counterfeit medicines and health products to flood SA.
At the same time, The World Economic Forum says illicit trade poses a ‘top 5’ risk to the SA economy.
It threatens to derail economic recovery and divert resources into fighting crime rather than rebuilding the economy.
Unless checked, illicit trade could also trigger a decline in confidence and a pullback of both domestic and foreign investment, says the report.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
