Potential Decrease in Tobacco Revenue due to Growing E-Cigarette Market

Regulations by 2FIRSTS.ai
Dec.15.2023
Potential Decrease in Tobacco Revenue due to Growing E-Cigarette Market
Philippine Congressman Joey Salceda predicts a further 11% decrease in tobacco tax revenue due to the growing e-cigarette market.

In recent news, according to the Philippine News Agency (PNA), Filipino Congressman Joey Salceda has stated that tobacco excise tax revenue is expected to further decline as the market share of e-cigarettes continues to grow. Salceda highlighted that the Bureau of Internal Revenue predicts a decrease of at least 11% in tobacco excise tax revenue for this year.

 

Sarseda predicts that the market size of e-cigarettes will reach PHP 13.244 billion. He claims that based on the average market price, the e-cigarette industry should pay at least PHP 5.66 billion in taxes. However, he emphasizes that e-cigarettes offer more products at lower prices, which is why smokers are choosing to switch to e-cigarettes.

 

He also suggested that the production and sale of e-cigarettes should be classified as an independent industry category for more effective regulation.

 

In addition, he commended the actions of the Bureau of Customs (BOC) in combating the illicit trade of e-cigarettes. Earlier, the BOC discovered 1.4 million tax-evading e-cigarettes manufactured by Flava Corporation in a warehouse located in Valencia.

 

Sarceda suggests that the customs bureau should heed warnings on anti-smuggling measures and implement a "business license" management system for e-cigarette manufacturers. He urges the resolution of contradictions in the tax bureau's registration system for e-cigarette companies and the clarification of responsibilities among exporters, importers, wholesalers, and retailers.

 

He also proposed the need to clarify third-party liability and called for the disclosure of taxable products at ports of departure.

 

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