Lawmaker to fight illicit trade of cigars, vapor products

Senator Sherwin Gatchalian announced on Friday his plans to combat the illicit trade of cigarettes and vapor products, aiming to address government revenue losses and mitigate health risks linked to smoking and vaping.

According to data from the Bureau of Internal Revenue (BIR), the government incurred a revenue loss of P40 billion from 2021 to 2024 due to the illegal trade of excisable products.

Gatchalian emphasized the importance of involving local government units (LGUs) in the crackdown on illicit activities.

“The LGUs know better than any of us. They are on the ground every day, every minute, and they must be allowed or deputized to crack down on the illicit trade of excisable products,” he stated.

He suggested imposing penalties on manufacturers, distributors, and retailers found in unlawful possession or removal of tobacco and vapor products from their production sites. Gatchalian also called for special appropriations to strengthen law enforcement efforts.

During a Senate ways and means committee hearing chaired by Gatchalian, the BIR reported a significant drop in collections from P174 billion in 2021 to P134 billion in 2024.

“We are recommending going all the way to retailers. By mere possession of illicit products, the retailer should be held liable. If we are saying that smoking and illicit products are detrimental to the health of our constituents, then retailers should also be liable because they are conduits to these detrimental health outcomes,” Gatchalian noted.

He also highlighted the role of the Anti-Money Laundering Council (AMLC) in monitoring transactions related to illicit trade.

“As we all know, someone is making money from all of this illicit trade. There are also reports that a portion of these profits funds criminal activities, including terrorism. So, the AMLC should be alerted to identify the personalities involved in these illicit transactions,” he said.

Gatchalian outlined several recommendations, including the imposition of a single tax rate on all vapor products, introducing an ad valorem tax on vaping devices, utilizing track and trace technology, and fostering intercountry cooperation.

Other proposed measures include convening the Anti-Agricultural Economic Sabotage Council, intensifying efforts to target retailers, strengthening enforcement against e-marketplaces and e-retailers through compliance orders, and enhancing the prosecution and conviction of offenders.

“We have initially formulated recommendations for the government to consider. While some require budget appropriations, many are policy-based and need no new laws. We are urging the Department of Finance to consider all of these recommendations,” Gatchalian concluded.

Leave a Reply

Your email address will not be published. Required fields are marked *