Philippines: Stronger crackdown on untaxed, imported vape products sought

15 September 2022

By Filane Mikee Cervantes, Philippine News Agency

MANILA – A ranking House leader is seeking a stronger crackdown on violations of the Vaping Regulation Law amid reports that some online sales of vapes from abroad are being categorized on online platforms as “toys” and “electronics”.

House ways and means committee chair Joey Salceda also said some online purchases through these sites are not being imposed excise taxes.

“The advocates of the Vaping Regulation Law argued that it was a better way to regulate the sector and supposedly save lives. It also provided rules on the sale of vape online. Well, let’s prove it,” Salceda said in a statement on Friday.

He said it was “easy” to buy vape without complying with the age tests, requirements for graphic health warnings, and other standard specifications

He also pointed out that there are online sales of vaping products “that are not even branded.”

“How do you catch a sale that has no brand? How do you apprehend them for violations of the rules that only registered brands and importers can import?” Salceda said.

Salceda pointed out that the de minimis rule in the Customs Modernization and Tariff Act, which provides that goods under PHP10,000 are subject to no duties and are inspected less stringently, is also used as a loophole for importations that skirt taxes.

“When these online stores classify vaping products as toys, or allow sales of unbranded products, then it becomes very easy to import them without paying excise taxes, because most vape sales are under PHP10,000 anyway,” he said.

He said “a blatant and contemptuous way” for vaping companies to appeal to younger people is wrapping the vape devices in “cases” that feature cartoons.

Under Republic Act No. 11900, vaping devices “shall not be targeted to or particularly appeal to persons under eighteen (18) years of age. Markings or characters that are likely to appeal to the youth such as the use of cartoons, anime, manga, animated characters, youth influencers, personalities and the like are prohibited.”

“So, many of them are skirting taxes, they’re marketing to children, and they are selling unbranded goods. And, what’s worse is that there is an extremely vague provision of RA 11900 which gives them a ‘transition period’ of 18 months to comply with the law,” he said.

Salceda also urged the Bureau of Internal Revenue (BIR) to craft regulations to fight counterfeits and ensure that imports of vaping products are imposed excise taxes.

“The BIR should impose some degree of accountability on online shopping networks that they are aiding and abetting tax evasion if they sell products that do not comply with excise taxes,” he said.

He said there should be a particular rule ensuring that vape is categorized as a restricted product, not as toys or electronics in online shops, which will help prevent tax evasion and marketing to minors. (PNA)