Tobacco manufacturers are taking the South African Revenue Service to court to stop it implementing a new rule requiring them to install CCTV equipment in their warehouses as a way to monitor production and rein in galloping tax leakage, which is reckoned to cost the fiscus upwards of R20 billion a year.
Failure to comply with the new rules could result in Sars cancelling licences issued under the Customs and Excise Act, fines or imprisonment. Members of Fita include Best Tobacco Company, Carnilinx, Folha Manufacturers, Home of Cut Rag and Protobac. “The system of self-regulation requires licensees to keep records of the number of cigarette sticks produced on a daily basis,” says Van Twisk.
What the new rules will do, says Fita, is authorise the Sars commissioner to legislate, when the law only allows him to regulate.