The Potential Losses to the Philippine Government from Illegal E-cigarette Sales

The Potential Losses to the Philippine Government from Illegal E-cigarette Sales
Illegal e-cigarette sales could cost the Philippines government approximately 13.3 billion pesos, says Energy Department official Sharon Garin.

According to a report from Philippine media outlet Philstar on August 24th, government officials in the Philippines have revealed that the government stands to lose approximately 13.3 billion pesos (equivalent to about 1.7 billion yuan) if the sale of illegal e-cigarette products continues.

Sharon Garin, the deputy minister of the Department of Energy in the Philippines, revealed that this amount is equivalent to Filipinos consuming 416 million milligrams of illegal e-cigarette products.

According to Jalil, considering the potential tax losses from e-cigarettes and tobacco products, the overall amount could exceed 50 billion pesos (approximately 6.4 billion yuan). This could pose challenges for the government's health insurance program in terms of funding.

She admits that the government is currently facing difficulties in combating individuals involved in the smuggling of illicit tobacco and e-cigarette products, as well as those who evade the law by producing them locally.

Illegal traders are continuously becoming more creative in their methods, as they learn how to expand their operations.

According to her knowledge, the Philippines is an archipelagic nation where enforcement agencies such as the Bureau of Internal Revenue and the Bureau of Customs are unable to regulate all the ports nationwide. As a result, some e-cigarettes and tobacco products are able to enter the country through private ports. Furthermore, certain businesses have imported machines to produce products within the Philippine borders without paying taxes.

Garin calls on the public to "beware" of purchasing and consuming illegal tobacco and e-cigarette products.

Philip Morris International (PMI) President Denis Gorkun is calling on the government, particularly the Department of Trade and Industry, to establish standards for e-cigarette products. His company has long been advocating for e-cigarettes as a "better alternative.

He stated that the company's employees have discovered "50% to 60%" of illegal tobacco and e-cigarette products in Bintan Island. These products are likely to have been smuggled into the area via small boats and then distributed to convenience stores or retail shops.

According to the law, e-cigarette manufacturers should not sell their products to minors, nor should they offer flavors that appeal to children. There are also additional restrictions in place.

Gorkun further disclosed that the company has "invested 500 billion pesos" in the introduction of new products such as e-cigarettes and nicotine patches, positioning them as alternatives to traditional smoking and even making them more affordable through installment payments.

Garin refuted the call to increase taxes on e-cigarette products in order to discourage smoking, as she claimed that this could potentially attract more illicit e-cigarette vendors into the market.

Galin said:

If we make it more expensive, they will choose cheaper alternatives. Whether through taxation, regulation, or prohibition, I believe none of these will deter our fellow citizens from continuing to smoke.

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