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Press Room  |  Press Statements

Last updated: 06 March 2018

FAWU Calls On SARS To Act Against Criminal Syndicates That Avoid Paying Tax

6 March 2018

The South African Revenue Service (SARS) needs to act against criminal syndicates who avoid paying tax by dealing in illicitly traded products.

This is the message that the Food and Agricultural Workers Union (FAWU) and some of the unions affiliated to the SA Federation of Trade Unions (SAFTU) will take to the revenue service`s head office, Legae La SARS, in Brooklyn Pretoria East, on Tuesday.

Thousands of workers from diverse industries will be calling on SARS and other law enforcement agencies to clamp down on illicit trade. Through manufacturing cheap products and not /under declaring taxes, Illicit traders are directly threatening thousands of jobs in the pharmaceutical, alcohol, tobacco and poultry industries.

The march will highlight the negative impact of illicit trade on the South African economy.

Illicit trade refers to the production and selling of goods that have not been declared to tax authorities, and whose manufactures have not paid the legally mandates duties on the product.

SARS has the government mandate to decisively act on illicit trade through implementation of different strategies. FAWU demands SARS and other government agencies to pounce on factories where these illicit products are made, to ascertain whether the products are fully declared for taxes, comply with all regulations, and are generating the required employment in the country.

"As illicit traders gain market access, legal players lose their market share and thus, begin to retrench workers," said FAWU General-Secretary Katishi Masemola.

Due to the under declaration by illicit players, it is estimated that R24 billion has been lost in tax revenue since 2010. This is money that could have built schools, hospitals, roads, clinics and contributed to government`s economy.

"Illicit traders steal from the mouths of the poor, and SARS has the power to act against this. What`s taking them so long to act against criminals who rob the state coffers of much needed revenue? said SAFTU General-Secretary Zwelinzima Vavi.

"As illicit traders gain market access, legal players lose their market share and thus, begin to retrench workers, a crisis happen is beyond their immediate control" said FAWU General-Secretary Katishi Masemola.

Due to the under declaration by illicit players, it is estimated that R24 billion has been lost in tax revenue since 2010 just on tobacco and cigarettes but there is an estimated R170 billion or 10% of Gross Domestic Product (GDP) if all other illicit traders and financial outflows are taken into account. This is money that could have built on both social infrastructure, in schools and hospitals, or economic infrastructure, in roads and rails, or other priorities.

Illicit traders, essentially, steal from the mouths of the poor, and SARS has the power and responsibility to act against this. What`s taking them so long to act against criminals who appropriate from the state coffers of much needed revenue remains a big question.

We hope that out of, and from this, protest action, attended by about 4 000 workers and community members, SARS will realize the negative impact of Illicit Trade and Illegal Manufacturing and will take the much needed action and necessary yet decisive action in clamping down these operations sooner rather than later.

FAWU, as a progressive trade union, cannot allow one more job loss as this is too much to tolerate in a country faced with what we call treble-challenges of unemployment, poverty and inequality given 40% unemployment (9.3m unemployed people), 24 million experiencing regular hunger, and our country being the most unequal society on Earth in terms of income distribution.

If anything, we believe that SARS, as a given authority can assist in collecting more, yet not doing enough though we will wish more be created and alternative created so as to brink to book those culprits.

Please call General Secretary Katishi Masemola for more information on 082 467 2509.

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