Finance Minister Enoch Godongwana has acknowledged that illicit trade is crippling South Africa’s economy, but anti-corruption group Tax Justice SA says the admission will mean little without swift, visible enforcement.

Presenting the national Budget on Thursday, Godongwana warned that illicit trade is draining billions from the fiscus, destroying jobs and undermining legitimate businesses. However, TJSA leader Yusuf Abramjee said years of weak enforcement have allowed criminal networks to flourish. The cost to the country, he said, is staggering.

“Illicit trade is draining around R100 billion a year from the fiscus,” Abramjee said. “That’s R250 million every single day going to criminals instead of schools, hospitals and policing.”

While the Budget raised so-called “sin taxes” in line with inflation, Abramjee argued that previous increases had unintentionally boosted the black market by pushing consumers towards cheaper illegal products. He said that with an estimated three out of four cigarettes sold in South Africa believed to be illicit, simply enforcing existing laws could deliver a major revenue windfall.

Godongwana announced plans for intensified joint operations involving the South African Revenue Service, the South African Police Service, the Border Management Authority and the defence force. But TJSA warned that the public has heard similar promises before.

“South Africans don’t need more speeches. They need arrests, prosecutions and recovered revenue,” Abramjee said. He called for properly resourced illicit-trade task teams, specialised police units to dismantle organised crime networks, and prosecutors focused on syndicate leaders rather than street-level traders.

Abramjee also urged tighter controls on tobacco manufacturing, including mandatory CCTV access for tax authorities at cigarette factories as a condition for licensing. Transparency measures, he said, are essential in a sector losing tens of billions of rand every year.

“Government must turn promises into prosecutions,” he said. “Reclaiming the billions stolen through the black market would boost the fiscus far better than any tax hike ever could.”

TJSA warned that without rapid, visible action, the Budget’s acknowledgement of the crisis risks becoming yet another missed opportunity to curb one of the country’s most costly forms of organised crime.

Finance Minister Enoch Godongwana has acknowledged that illicit trade is crippling South Africa’s economy, but anti-corruption group Tax Justice SA says the admission will mean little without swift, visible enforcement.

Presenting the national Budget on Thursday, Godongwana warned that illicit trade is draining billions from the fiscus, destroying jobs and undermining legitimate businesses. However, TJSA leader Yusuf Abramjee said years of weak enforcement have allowed criminal networks to flourish. The cost to the country, he said, is staggering.

“Illicit trade is draining around R100 billion a year from the fiscus,” Abramjee said. “That’s R250 million every single day going to criminals instead of schools, hospitals and policing.”

While the Budget raised so-called “sin taxes” in line with inflation, Abramjee argued that previous increases had unintentionally boosted the black market by pushing consumers towards cheaper illegal products. He said that with an estimated three out of four cigarettes sold in South Africa believed to be illicit, simply enforcing existing laws could deliver a major revenue windfall.

Godongwana announced plans for intensified joint operations involving the South African Revenue Service, the South African Police Service, the Border Management Authority and the defence force. But TJSA warned that the public has heard similar promises before.

“South Africans don’t need more speeches. They need arrests, prosecutions and recovered revenue,” Abramjee said. He called for properly resourced illicit-trade task teams, specialised police units to dismantle organised crime networks, and prosecutors focused on syndicate leaders rather than street-level traders.

Abramjee also urged tighter controls on tobacco manufacturing, including mandatory CCTV access for tax authorities at cigarette factories as a condition for licensing. Transparency measures, he said, are essential in a sector losing tens of billions of rand every year.

“Government must turn promises into prosecutions,” he said. “Reclaiming the billions stolen through the black market would boost the fiscus far better than any tax hike ever could.”

TJSA warned that without rapid, visible action, the Budget’s acknowledgement of the crisis risks becoming yet another missed opportunity to curb one of the country’s most costly forms of organised crime.