RG cigarettes sell for an average price of ZAR 10 (EUR 0.63) while the per pack tax rate collected by the South African Revenue Services (Sars) is ZAR 17.85. Cigarettes sold for less than the minimum tax owed to Sars can be deemed as illicit products, according to a 2015 judgement, ANA said.
The market study by the research house showed brands selling below the minimum tax rate had grown in market share by 25 per cent over the last three months. These brands’ share of the “informal retail sector” rose from 33.1 per cent to 41.8 per cent in the June-August period, the study found.
The RG brand is made by Gold Leaf Tobacco Corporation, which is said to represent 73 per cent of the market for illegal cigarettes and is set to become the biggest cigarette maker in the country by volume, ANA reported.