…leaving low income groups vulnerable
Since South Africa introduced a ban on the sale of tobacco when it imposed national lockdown that also led to the closure of almost all border gates it shares with Lesotho, it has become difficult to access cigarettes imported from SA with normal prices.At the beginning of the national lockdown that commenced in April in Lesotho, most ordinary smokers relied on low-priced illicit tobacco sold by street vendors on the pavements of the country’s towns.
But stalls selling these wide ranging brands mostly smuggled from South Africa soon ran out of stock, following closure of borders separating the two countries.According to Morabe Monyakane, an economist and public speaker, that pushed for businesses to take advantage of the high demand in the market by raising prices of remaining genuine brands that are still in circulation.
“For example; a carton of Peter Stuyvesant (10 boxes of 20 sticks in each box) used to sell below M500 but now it goes for unregulated price of between M950 and M1 200. A loose stick that used to be M3 is now sold for M5 and M6 varying with places.
“The pinch of this excessive charge is mostly felt by the poor because the illicit tobacco trade often has the biggest impact on individuals in low socio-economic groups, as these smokers are most sensitive to prices.
According to Morabe Monyakane, an economist and public speaker, that pushed for businesses to take advantage of the high demand in the market by raising prices of remaining genuine brands that are still in, “Even with these high prices, addicted smokers fail to give up, and inaccessibility to cheaper cigarettes leaves their families financially compromised. The government was also losing money in uncollected tax on illicit cigarettes while the tobacco industry was suffering from unfair competition,” he indicated.
In a statement of March 2, the British American Tobacco (BAT) which is a leading tobacco and nicotine products group said it is estimated that illicit tobacco products make more than 15 percent of the total tobacco products in Lesotho. BAT further showed that the Lesotho government lost about M17 million from illicit cigarette sales in 2019 alone.
“Cigarettes will be smuggled from all over the low taxed jurisdictions within the region, including South Africa and sold in the informal markets of Lesotho. The government is set to lose at least M93 million per annum in taxes,’’ the company also warned.
In 2018, the Lesotho Revenue Authority (LRA) confiscated 38 boxes of RG cigarettes containing 380 000 sticks worth over M1.1 million at the Maseru Bridge. RG was reported as an illicit cigarette as it is usually sold below the M20 threshold of the packet of cigarette.
The cigarettes that were confiscated were smuggled by hawkers and were not declared. No excise duty was paid either, LRA said in a statement. The illicit trade in tobacco products poses a serious threat to public health because it increases access to tobacco by making cigarettes more affordable.
People who otherwise might have quit smoking continue to smoke, and people who might never have started smoking initiate a habit that will cause them harm, and that they are likely to regret in the future, warned International Agency for Research on Cancer. When he was the Minister of Finance, Dr Moeketsi Majoro who is now the Prime Minister had said, “The problem the country is faced with is that of taxpayers who are already paying for medical expenses arising from tobaccorelated illnesses”.