Cigarette Ban Less Effective Than Higher Sin Tax

Cigarette ban remains in South Africa. South Africans are buying illegal cigarettes on the streets and in car parks. Importantly, relatively few smokers quit under the ban. A recent study suggests higher sin tax would probably lead to less smoking.

Cigarette Ban less effective than a higher sin tax

Cigarette banning has driven up the cost to consumers by 250%. Importantly, it is a cost that smokers will pay according to UCT’s Research Unit (REEP). As a result of the study, researchers suggest unbanning cigarettes and raising the sin taxes. This is more likely to reduce smoking in the long run.

The argument raised against such a move is that illegal trade would continue at a lower price. UCT points out that the real problem is proper law enforcement. Importantly, Reep’s Professor Corné van Walbeek, says “Even if illicit trade were to increase as a result of lax enforcement … illicit trade would not make up 100% of the market, as it currently does.”

Cigarette sales continue under the ban

South African smokers feel victimised by the smoking ban. It is the only country claiming it as a measure to fight COVID-19. The ban failed to stop smokers from smoking. REEP‘s study shows that only around 11% of smokers who tried to quit under the ban succeeded. As a result of the increased price, 56% say they might quit. If the cost is a factor, then it makes sense to unban cigarette sales and increase the sin tax. Worse, the reason given for the ban was to stop smokers from sharing cigarettes (and spreading COVID-19). The latest study indicates that the sharing of cigarettes has increased from 1.7% pre-lockdown to 8.9% during the lockdown. Shockingly, an increase of 430%.

SA’s cigarette ban could backfire spectacularly: According to Uni of CT Research Unit on Economics of Excisable Products, current regulations opened loopholes for illicit products to be distributed in SA, and created environment that will likely encourage smoking once ban lifted.

— René (@runawayrene) July 21, 2020

Smokers and taxpayers want the ban lifted

Smokers who quit under the ban say they did so in the first month of lockdown. Subsequently, the number of quitters has slowed to a trickle.  93% of people still smoking are breaking the law to feed their habit. Illegal sales have soared with many unemployed selling cigarettes to feed their families. Referring to some cigarette sellers being arrested, Tweeter #Tobaccomafia, says “#Corrupt #SAGov officials get caught robbing billions from #SouthAfrica & get??? But desperate citizens trying to feed their family get #CriminalRecords.”

Tax Justice South Africa insists the ban is ineffective, unnecessary and the cost to the country outrageous.

The soaring price of cigarettes on the illegal market is causing smokers to share, say UCT experts.
Five times as many are now sharing regularly.
The ban is meant to stop people sharing.
The ban is bust.#TheBanMustFall #LiftTheBanSA @PresidencyZA @DlaminiZuma https://t.co/NRyxBBwOjP

— Tax Justice South Africa (@TaxJustice_SA) July 21, 2020

Tax Justice South Africa also tweeted “this is why it’s such a serious matter that the @GovernmentZA tobacco ban is diverting R35 million sin taxes every day to criminals in illicit trade. R4 billion has been lost already.”

What is your opinion on the continuance of the cigarette ban? Have your say.

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