Philippines stands to lose P13 billion to illicit vape products

MANILA, Philippines — The government could lose an estimated P13.3 billion if the sale of illicit vaporized nicotine or vape products persists, an official disclosed.

The amount could be converted to 416 million milligrams of illegal vape products potentially consumed by Filipinos, according to Department of Energy Undersecretary Sharon Garin.

Combining estimated losses in government revenue from taxing both vape and cigarette products, which could reach over P50 billion, Garin asserted that PhilHealth or the government’s health insurance program could be difficult to fund.a

She admitted the government is currently having a hard time going after those smuggling illegal tobacco and vape products, as well as those who produce them locally but evade laws.

“Illicit traders get more creative everyday so they learn how to expand their business,” she said during the Kapihan sa Manila Bay media forum yesterday.

Based on her knowledge, law enforcers like the Bureau of Internal Revenue and the Bureau of Customs could not guard all ports in the country, being an archipelago, because some vape and tobacco products enter the country by private ports.

Also, some businesses have brought in machinery so they could produce products here without paying taxes.

Garin called on the public to be “conscious” about buying and consuming illegal tobacco and vape products.

For his part, multinational tobacco company Philip Morris Fortune Tobacco Company (PMFTC) president Denis Gorkun called on the government, particularly the Department of Trade and Industry, to issue standards on vape products which his company has been promoting as “better alternatives” to cigarettes.

During the same media forum, he shared the company’s field enforcers have detected “50 to 60 percent” of illicit tobacco and vape products in Mindanao, which could have come from small boats entering the region and making their way to sari-sari or retail stores.

Under the law, vape producers should not be sold to minors and should not have flavors attractive to children, among other restrictions.

Gorkun also disclosed PMFTC has “invested P500 billion” to bring in new products like vapes and nicotine patches and introduce them as alternatives to smoking, even making them affordable by introducing installment payment.

Garin also disputed calls to impose higher tax on vape products to prevent people from continuing to smoke because she claimed it could attract more illicit vape traders to come in.

“If we make it more expensive, they go for the cheaper ones. Taxation or regulation, or even prohibition, I don’t think that will stop our countrymen from smoking.”