According to a report by Philstar on November 7th, during a roundtable discussion on Tuesday evening (the 5th), Romeo Lumagui Jr., the Commissioner of the Bureau of Internal Revenue (BIR) in the Philippines, noted that BIR has collected 1 billion pesos (17.05 million dollars) since requiring e-cigarette retailers to use e-cigarette stamps.
There are approximately 1 billion pesos, we did not have any taxes on e-cigarette products before.
Although 1 billion pesos may seem substantial, Lumaji emphasizes that this amount still has a huge potential for growth.
Considering that the majority of e-cigarette products on the market still do not have the appropriate labeling, this 1 billion figure is actually not that high, representing less than 10% or 20% of the total market size.
Until June of this year, the BIR required all imported and locally produced e-cigarette products to use fourth-generation internal tax stamps. The lack of internal tax stamps implies unpaid consumption taxes, which could result in e-cigarette products being confiscated and potentially facing tax evasion charges.
Despite the consumption tax stamp, Lumaji acknowledges that authorities will still face challenges in narrowing the gap in consumption tax revenue. Industry estimates indicate that with the exacerbation of false declarations, ongoing smuggling, and illegal sales of e-cigarette products, revenue losses this year could double, reaching 10 billion pesos (1.7 million US dollars).
As we have only just begun imposing taxes on e-cigarette products, the narrowing of the consumption tax gap may not be very noticeable. We still need to strengthen awareness on this matter.
As of the end of October, the National Tax Bureau has uncovered approximately 500 illegal e-cigarette retailers and wholesalers nationwide.
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