By Lebone Rodah Mosima
The South African Revenue Service (SARS) is preparing to issue a tender for a cigarette tracking system aimed at combating illicit trade and recovering billions of rands in lost tax revenue.
SARS and the National Consumer Commission (NCC) announced on Thursday that they had agreed to coordinate their efforts to introduce the system.
Known as Track and Trace, the system uses unique identification codes, such as serial numbers or machine-readable labels, to monitor products from their point of manufacture or importation through distribution and sale.
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The agreement follows the publication this week of a discussion document on proposed Track and Trace regulations by the Department of Trade, Industry and Competition (dtic).
The regulations were published by dtic Minister Parks Tau following a recommendation from the NCC, and are open for public comment until 11 December 2026.
Meanwhile, SARS is preparing to issue a Request for Proposal (RFP) to procure a cigarette tracking system under its customs, excise and revenue-protection mandate.
“These two complementary processes are aimed at tackling illicit trade,” the institutions said in a joint statement.
The dtic estimates, citing SARS, that illicit trade costs South Africa R100 billion annually, affecting industries including tobacco, alcohol, pharmaceuticals, food and consumer appliances.
“For example, illegal trade in cigarettes cost the fiscus billions in lost excise revenue as evidenced by the estimated R18 billion lost in 2022,” the department said.
It said that illicit products also posed risks to consumers, particularly where counterfeit medicines, unsafe food and unregulated electrical appliances entered the market.
“Additionally, counterfeit medicines as well as unregulated foodstuffs and appliances endanger public health.”
SARS and the NCC said they would align technical standards, information-sharing, governance and enforcement arrangements to prevent duplication and minimise compliance costs for businesses.
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Under the arrangements, SARS would focus on customs, excise duties and revenue protection, while the NCC would use the system to support enforcement of the Consumer Protection Act.
The initiative forms part of the National Illicit Economy Disruption Programme announced by President Cyril Ramaphosa during his State of the Nation Address in February.
The programme seeks to bring government agencies and private-sector stakeholders together to tackle illegal economic activity.
“Through effective use of data analytics and AI, we will be targeting high-risk sectors like tobacco, fuel, alcohol and other counterfeit products,” Ramaphosa said.
The government intends to introduce tracking capabilities in phases, beginning with cigarettes and extending its efforts to other high-risk sectors, including fuel and alcohol.
SARS and the NCC said the growing illicit market in products subject to excise duties had severely harmed legitimate businesses, while depriving the government of revenue needed to fund public services.
