Years after SARS uncovered and intervened against plastic producers and wholesalers accused of withholding the environmental levy on supermarket plastic bags, the practice appears to be continuing, with authorities struggling to stamp it out.

After moving against plastic manufacturers and wholesalers in 2022 for allegedly failing to pay over the environmental tax levied on shopping bags, the tax authority now admits that – while smaller in scale than other illicit economic activities – the practice continues to cost the fiscus millions.

According to TimesLIVE, SARS said financial investigations into plastic bag levies involve a range of complexities during the evidence-gathering and analytical phases.

‘Plastic bags are typically unnumbered, high-volume, disposable and consumable products, which lend themselves to a variety of fraudulent schemes, not unlike those found in the tobacco, fuel and alcohol sectors. One particularly worrying element is how traders, retailers and distributors seem willing to accept and purchase products from suppliers at values clearly below what is possible in the market. This ... indicates a level of complicity or, alternatively, opportunistic profiteering that must be halted,’ SARS said.

It continues to grapple with illicit trade in alcohol, cigarette and fuel, while the non-payment of the 32c on plastic bags persists, leaving compliant manufacturers unable to compete with offenders, sources close to the retail plastic bag production value chain told Business Times.

For the 2024/25 financial year, the government collected R698.71m from the environmental levy on plastic bags.

Sars estimates that revenue leakage within the value chain amounts to about R1bn over the past five years.

Full TimesLIVE report