Senator mulls fight vs. illicit trade of cigars, vapor products

By Leonel Abasola, Philippine News Agency

Gatchalian said the Anti-Money Laundering Council (AMLC) should also be mobilized to track transactions involving illicit products. (Pexels photo)

MANILA – Senator Sherwin Gatchalian on Friday said he will devise plans to fight the illicit trade of cigarettes and vapor products to help address revenue loss for the government and health risks associated with smoking and vaping.

Records from the Bureau of Internal Revenue (BIR) showed that the government is facing a PHP40-billion revenue loss from 2021 to 2024.

One of his recommendations is to tap the participation of local government units (LGUs) in interagency collaboration.

“The LGUs know better than any of us. They are on the ground every day, every minute, and they must be allowed or deputized to crack down on the illicit trade of excisable products,” Gatchalian said in a statement.

He also proposed the introduction of penalties specific to manufacturers, distributors, and retailers on unlawful possession or removal from place of production of tobacco and vapor products and special appropriation for law enforcement agencies.

During a hearing of the Senate committee on ways and means chaired by Gatchalian, the BIR said that from PHP174 billion in 2021, the collection dropped to PHP134 billion in 2024.

“We are recommending going all the way to retailers. By mere possession of illicit products, the retailer should be held liable. If we are saying that smoking and illicit products are detrimental to the health of our constituents, then retailers should also be liable because they are conduits to these detrimental health outcomes,” he said.

Gatchalian said the Anti-Money Laundering Council (AMLC) should also be mobilized to track transactions involving illicit products.

“As we all know, someone is making money from all of this illicit trade. There are also reports that a portion of these profits funds criminal activities, including terrorism. So, the AMLC should be alerted to identify the personalities involved in these illicit transactions,” he said.

“We have initially formulated recommendations for the government to consider. While some require budget appropriations, many are policy-based and need no new laws. We are urging the Department of Finance to consider all of these recommendations.”

Other proposed resolutions include the imposition of a single tax rate on all vapor products and an ad valorem tax on vaping devices, use of track and trace technology, enforcement of intercountry cooperation and coordination, convening the Anti-Agricultural Economic Sabotage Council, increasing efforts to run after retailers, strengthening enforcement against e-marketplaces and e-retailers through issuance of compliance orders, and improving prosecution and conviction of offenders.