The South African Revenue Service will have to “start from scratch” in its efforts to find a service provider that can help it clamp down on illicit cigarette trade, Commissioner Edward Kieswetter said.

The commissioner was briefing media on the preliminary financial results on revenue collections for the 2019/20 tax year. Revenues grew 5.3% to R1.356 trillion. With excise duties, which includes taxes on cigarettes, growing 9.3% to R127 billion.

Last year SARS issued a tender to find a service provider for production management of a “track-and-trace” solution that would be used to monitor the movement of cigarettes from production to sale. This is to ensure that no tax revenue would be lost to SARS through the illicit economy.

The initial deadline to submit bids was 20 June 2019, but this was extended to allow the Commissioner to “consider all relevant factors and consult further”, SARS said at the time. SARS said it would provide information on the procurement process and the new deadline in due course, Fin24 previously reported.

“I am personally, deeply disappointed in lack of progress we made there,” said Kieswetter. “But when I arrived there were too many questions around the track and trace RFPs (request for proposals) in the market,” said Kieswetter.

He added, that in all likelihood the process will have to “start from scratch”.

According to the initial request for proposal, cigarette manufacturers were to implement the track-and-trace-solution on production lines at production facilities, locally and abroad – for cigarette products produced, imported, marketed and sold in South Africa.

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