THE Ministry of Finance is to sign a Memorandum of Understanding (MoU) with the Tobacco Institute of Southern Africa (TISA) before the end of this month to curb illegal imports and trading in contraband cigarettes and other tobacco products.
The MoU will forge greater collaboration between the ministry's directorate of customs and excise and TISA to facilitate legal trade in tobacco products while combating illicit activities through information sharing, investigations and curbing of illegal trade in cigarettes and other tobacco products in the southern African region.
The Ministry of Finance said that TISA has already assisted the country to track illicit trade in cigarettes even while the MoU was not in place.
While Minister of Finance Saara Kuugongelwa-Amadhila could not in exact terms quantify the loss in revenue as a result of illegal trade in tobacco in Namibia, she told The Namibian that the losses can be counted in millions of Namibia dollars.
"The estimates for Namibia is huge," Kuugongelwa-Amadhila said.
Police spokesperson Edwin Kanguatjivi yesterday related two cases of reported smuggling of tobacco last year.
One incident was reported at Rundu, and a bigger bust was made at the port at Walvis Bay when a container with 1 000 cartons of illegal cigarettes worth N$18 million were found. The perpetrator in the Walvis Bay incident had reportedly declared the cigarettes as washing powder in an attempt not to pay N$3 million on import taxes.
Illicit trade in tobacco products is becoming an increasingly serious problem in southern Africa. South Africa is considered the largest market for contraband cigarettes mostly smuggled from Zimbabwe. Namibia is considered a transit country. Contraband cigarettes in the region now account for 30% of the market.
The Southern African Customs Union (Sacu) loses an estimated N$1,5 billion in excise revenue yearly due to smuggling of tobacco products.
A TISA report indicates that Namibia loses more than N$143 million, or about 25% of its annual Sacu revenue.
It reports that the livelihoods of 5 000 Namibians working in the legitimate industry directly or indirectly are threatened as a result of illicit trade.
Internationally, 420 billion of the 6 000 billion cigarettes consumed yearly, are smuggled which results in a loss of US$30 billion in tax revenue.
Kuugongelwa-Amadhila said the Southern African Development Community (SADC) member countries, which have cooperation mechanisms in place already, have in principle agreed to align their legislation, institutions and administration to share information and forces to clamp down on illicit trading in cigarettes.
Kuugongelwa-Amadhila said perpetrators are known to survey enforcement activities at border points and avoid areas where there are strict control to smuggle illegal tobacco into countries.
She invited members of the public to join forces with Government and come forward to inform law enforcement agencies should they suspect trade in contraband products because such activities does "double damage" to the Namibian economy.
Kuugongelwa-Amadhila said contraband cigarettes often pose an additional health risk because the products are not subject to industry standards.
She said it also encourages the organisation of criminal syndicates that use illicit funds for other serious criminal activities like terrorism, organised crime and drugs, fire arms and human trafficking.
Concerned about the magnitude of tobacco smuggling across borders of its member countries, the SACU Council of Ministers - consisting of finance and trade ministers - recently approved administrative collaboration at customs among countries.
Legislation to this effect will in the foreseeable future be tabled in the Namibian National Assembly.
Namibia will also finalise regulations to bring to life the Tobacco Products Control Act that attempts the make the country smoke-free.
Deputy Director of Public and Environmental Health in the Ministry of Health and Social Services, Benson Ntomwa, yesterday said there have already been international meetings where Namibia has reported on progress made to enact regulation to be in accordance with World Health Organisation's (WHO) Framework Convention on Tobacco Control, the first world treaty that requires all member states to protect their population from exposure to tobacco smoke.
At the end of January, another regional meeting will take place in South Africa.
"Public health inspectors in the regions [Namibia's political regions] are all working on putting together regulations, then we will have regulatory tools to put our public health messages on cigarette packets. Once the regulation is finalised, we will treat tobacco use the same as any other public health problem," Ntomwa said.
It is estimated that about 11% of the adult Namibian population are smokers. About 1,5 million cigarettes, or 75 000 packs of twenties, are sold and consumed legally in Namibia each year.