Senator Sherwin Gatchalian has announced his intention to introduce new strategies to tackle the illegal trade of cigarettes and vaping products, aiming to curb significant government revenue losses and mitigate health risks linked to smoking and vaping. The Bureau of Internal Revenue (BIR) has reported a projected revenue shortfall of PHP40 billion from 2021 to 2024 due to this illicit trade.
Gatchalian emphasized the importance of involving local government units (LGUs) in these efforts, noting their daily presence and understanding of local issues. He suggested empowering LGUs to take action against the illegal trade of excisable goods. Additionally, he proposed specific penalties for manufacturers, distributors, and retailers caught with or removing tobacco and vapor products unlawfully from production sites, alongside special funding for law enforcement.
During a session of the Senate committee on ways and means, which Gatchalian chairs, it was revealed that tax collections fell from PHP174 billion in 2021 to PHP134 billion in 2024. Gatchalian advocated for holding retailers accountable for possessing illicit products, arguing that they contribute to the health risks faced by the public.
He also called for the Anti-Money Laundering Council (AMLC) to investigate transactions related to these illegal trades, pointing out that profits from such activities might be funding criminal endeavors, including terrorism. Gatchalian stressed the need for the Department of Finance to consider his recommendations, some of which require budgetary allocations, while others are policy-driven and do not necessitate new legislation.
Further proposals include a uniform tax rate on all vapor products, an ad valorem tax on vaping devices, the implementation of track and trace technology, enhanced international cooperation, activation of the Anti-Agricultural Economic Sabotage Council, intensified efforts against retailers, stricter enforcement against online marketplaces and e-retailers, and improved legal proceedings against offenders.