Diplomats spent R423 million on alcohol and cigarettes, probed for reselling duty-free products

Information seen by the African News Agency shows that over six months, duty-free stores recorded sales of R423 million, with 2,200 diplomats accounting on average for R70.5 million per month.

PRETORIA, April 8 (ANA) – Several diplomats representing foreign governments in Pretoria are being investigated for diverting alcohol and cigarettes purchased from duty-free shops into a booming South African illicit market.

This has reportedly cheated the South African Revenue Service (SARS) of an estimated R100 million (US$6.9 million) in unpaid taxes every month. The alcohol and cigarettes are reportedly sold in large volumes to businesses and liquor traders.

Foreign diplomats found to be involved in the high-level dodgy deals will face repercussions, said Lunga Ngqengelele, the spokesman for International Relations and Cooperation Minister Dr Naledi Pandor.

“I can confirm that we are aware of the investigation and we are working with the SARS, and we are working with other law enforcement authorities to make sure that we get to the root of this issue,” Ngqengelele told the African News Agency (ANA) via telephone from Mozambique where regional heads of state and ministers are meeting to discuss Islamist-linked terror attacks.

He declined to disclose which countries the implicated diplomats were from, but added: “I can tell you that we would want those that are found guilty to be brought to book so that we can stop this thing from going on.”

The diplomats allegedly purchase the duty-free products, mainly alcohol and cigarettes, purportedly for their own consumption, only to re-sell them in the country. The illicit trade in alcohol and cigarettes in South Africa has exponentially increased under a year-long Covid-19 lockdown which has seen intermittent bans on the legal sale of the products.

SARS has obtained information from licensed duty-free shops regarding the sales values, product quantities and the details of the foreign diplomats who have been purchasing items. ANA understands that the stores were requested to supply complete lists of all transactions.

In accordance with South African legislation, 171 embassies and international organisations are permitted to purchase from these duty-free shops which were established to service the diplomatic community.

More than 2,200 diplomats and family members have made purchases, the most common commodities being rum, whiskey, brandy, liqueurs, cigarettes and cigars.

Information seen by ANA shows that over a six month period, duty-free stores recorded sales of R423 million, with 2,200 diplomats accounting on average for R70.5 million per month.

The official opposition Democratic Alliance on Thursday called for the expansion of ongoing investigations and the prosecution of implicated diplomats.

“While the DA welcomes the new sets of regulations to regulate the amount of liquor and cigarettes diplomats would be allowed to buy, SARS and the Department of International Relations and Cooperation must approach the Pan-African Parliament and the African Union to enlist their help in prosecuting diplomats found guilty of cheating SARS out of an estimated R100 million in taxes every month,” DA legislator Darren Bergman said.

“They should also be fined heavily to recuperate the lost income.”

– African News Agency (ANA), Editing by Stella Mapenzauswa