Still small
MANILA, Philippines — The Bureau of Internal Revenue (BIR) has collected about P1 billion from the imposition of excise stamps on vape products but the amount is deemed small as many players have yet to fully comply.
In a roundtable discussion late Tuesday night, BIR commissioner Romeo Lumagui Jr. said initial data showed that the agency has so far collected P1 billion from vape stamps since vape sellers were mandated to use them.
“It’s more or less P1 billion and before, we were not collecting anything from vape products,” Lumagui told reporters.
While P1 billion seems to be a huge amount, Lumagui emphasized that there is still huge potential for the value to further increase.
“That P1 billion is actually still small considering that the majority [of vapes] in the market still do not have stamps,” Lumagui said.
“It’s not even 10 or 20 percent of the total,” he said.
The imposition of vape stamps was one of the strategies that BIR employed to run after vape smuggling especially after many consumers have shifted to vape products.
Unfortunately, it has become difficult for the BIR to go after illegal ones given that they have become a backyard industry whose production can be done even at home.
It was only in June this year when the BIR mandated the fourth generation internal revenue stamps for all imported and locally manufactured vape products.
Lack of internal revenue stamps means non-payment of excise taxes, which would result in the seizure of vape products and the possible filing of tax evasion cases.
Even with the vape stamps, Lumagui admitted that it would still be challenging for the BIR to close the gap in excise tax collections.
Industry estimates showed that lost revenues from the continued smuggling and illegal selling of vape products will likely double to P10 billion this year as mis-declaration worsens.
“The decrease (in excise tax gap) might not be that big since we just started with vape. Then in terms of awareness, we still need to ramp up,” Lumagui said.
As of end-October, BIR has cracked down on some 500 illicit vape retailers and resellers as part of its nationwide raids.