The illicit cigarette market in six South African townships

Abstract

BackgroundWe estimate the size of the illicit cigarette market in low socioeconomic areas in South Africa before and after a tax increase. In 2018, the real excise tax increased by 3% and the value-added tax (VAT) rate increased from 14% to 15%. Thus, the real tax on cigarettes increased by 4%.MethodsA total of 2427 smokers were interviewed over two rounds of data collection (1234 before the tax increase and 1193 after). Data were collected in six townships across four of South Africa’s nine provinces. Smokers were asked about their most recent cigarette purchase. Cigarettes purchased for R1 (US$0.08) or less per stick are presumed illicit, based on a threshold price, which includes production costs and taxes.ResultsIn 2017 and 2018 respectively, 34.6% and 36.4% of smokers in the sample purchased illicit cigarettes. The increase in the proportion of illicit purchases was not statistically significant. Smokers with relatively low socioeconomic status, those who have low levels of education and those who are older or unemployed are most likely to purchase illicit cigarettes.ConclusionsThe illicit cigarette trade in South African townships is widespread. The government should implement an independent track and trace system to curb tax evasion. This would reduce the availability of illicit cigarettes, improve public health and increase excise tax collection.

Illicit Tobacco in Lithuania: A Cross-Sectional Survey

“…Findings from our study confirmed that, as in the previous studies, older smokers [ 29 , 33 , 38 ], smokers who smoke more intensively [ 3 , 34 , 38 ] and have lower education [ 3 , 19 , 33 , 34 , 38 , 39 ] are more likely to use the illicit cigarettes.…”

“…Evaluation of industry-funded studies conclude that there are some major issues regarding the quality of the estimates, including lack of methodological transparency; problems with data collection, analytical methods and result interpretation; and that they are not peer-reviewed [ 10 , 28 ]. Some studies show that industry-driven data exaggerate the extent of illicit trade [ 3 , 10 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 ]. It appears that our findings support this observation.…”

“…The results of this study may assist policy makers to revise tobacco taxation and approaches for controlling illicit tobacco trade. Another strength of the analysis is that we followed the recent practice [ 3 , 13 , 19 , 29 , 31 , 33 , 34 , 39 , 45 , 46 ] to validate self-reported information with observational pack data by asking to show the latest purchased cigarette pack and inspecting it.…”

“…This is especially valid if smokers are questioned in the household where other family members might be present. Following the example of other studies [ 29 , 33 , 34 ], the latter situations might be avoided if smokers are questioned in the street.…”

Measuring the illicit cigarette market in the absence of pack security features: a case study of South Africa

“…This paper is based on three standalone academic articles. [7][8][9] Table 1 provides a summary of the three articles, including sample sizes, years covered, data, results, advantages, disadvantages, and practical tips.…”