According to The Philippine Star on June 20th, the Philippine government has lost 5 billion pesos (85.07 million US dollars) in tax revenue due to the smuggling and illegal sale of e-cigarettes.
Consumer group Bantay Konsyumer, Kalsada, Kuryente (BK3) revealed that the current consumer spending in the e-cigarette market in the Philippines has reached 13 billion pesos (2.2 billion US dollars), suggesting that taxes should exceed 5 billion pesos (85.07 million US dollars). However, the Bureau of Internal Revenue's tax revenue is only 138 million pesos (2.34 million US dollars).
The convener of BK3, Karry Sison, stated, "This further indicates that e-cigarette products are able to enter the market without paying proper duties and taxes, causing harm to our economy.
The Bureau of Internal Revenue (BIR) has acknowledged that the increasing use of e-cigarette products is one of the reasons for the decline in tobacco consumption tax revenue. In response to this issue, the government is cracking down on the illegal sale and smuggling of e-cigarette products through mandatory testing and registration, as well as enforcing tobacco taxes. However, despite the government's efforts to address the problem of the illegal e-cigarette market, the BIR faces difficulties in tracking down illegal e-cigarette products as production can be completed in home backyards.
At the same time, the Department of Trade and Industry (DTI) and the "Minimal Government Thinkers" believe that there is currently no need to raise tax rates.
The DTI pointed out that increasing taxes will not force non-taxpayers to pay taxes, but rather it will actually penalize those who are already compliant with tax laws.
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