Lowering excise tax on tobacco, vapor products not solution to illicit trade — Gatchalian
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Lowering excise tax on tobacco, vapor products not solution to illicit trade — Gatchalian
An individual is photograph vaping an electronic cigarette in Quezon City on May 31, 2024. Maria Tan, ABS-CBN News
An individual is photograph vaping an electronic cigarette in Quezon City on May 31, 2024. Maria Tan, ABS-CBN NewsMANILA — After three hearings, the Senate Committee on Ways and Means concluded that lowering excise tax on tobacco products is not the solution to curb illicit trade as proposed under House Bill 11360.
MANILA — After three hearings, the Senate Committee on Ways and Means concluded that lowering excise tax on tobacco products is not the solution to curb illicit trade as proposed under House Bill 11360.
Committee Chairman Senator Sherwin Gatchalian opened Monday’s hearing by saying, “Our findings during the three hearings is that the solution to curb illicit trade will not come from reduction of taxes, that is our finding. It will come from strengthening our enforcement, it will come from giving incentives to our enforcement agencies and also mobilizing our LGUs as well as of course, winning the cases.”
Committee Chairman Senator Sherwin Gatchalian opened Monday’s hearing by saying, “Our findings during the three hearings is that the solution to curb illicit trade will not come from reduction of taxes, that is our finding. It will come from strengthening our enforcement, it will come from giving incentives to our enforcement agencies and also mobilizing our LGUs as well as of course, winning the cases.”
Based on data from the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR), Gatchalian said there are more than a thousand seizures by both agencies in the past years but fewer than 20 are filed in courts.
Based on data from the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR), Gatchalian said there are more than a thousand seizures by both agencies in the past years but fewer than 20 are filed in courts.
According to BIR Assistant Commissioner Jethro Sabariaga, cigarette products and heated tobacco products should be taxed at the same rate, but vapor products should be taxed higher because the consumption is different.
According to BIR Assistant Commissioner Jethro Sabariaga, cigarette products and heated tobacco products should be taxed at the same rate, but vapor products should be taxed higher because the consumption is different.
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“One pack of cigarettes can be consumed in 300 puffs, the lowest number of puffs you can consume one vape product is 600 puffs,” Sabriaga said.
“One pack of cigarettes can be consumed in 300 puffs, the lowest number of puffs you can consume one vape product is 600 puffs,” Sabriaga said.
VAPE PRODUCTS
Gatchalian also urged the Department of Trade and Industry (DTI) to follow the Department of Justice's (DOJ) opinion that there should only be two flavors of vapes—plain menthol and plain tobacco.
Gatchalian also urged the Department of Trade and Industry (DTI) to follow the Department of Justice's (DOJ) opinion that there should only be two flavors of vapes—plain menthol and plain tobacco.
“Ang goal kasi natin is to arrest the increase of vape use among the young. And one of the causes of that increase in vape use is the attractiveness of the flavor. Binebenta nila illegal na, iba-ibang flavor pa, talagang tataas yung paggamit ng mga bata,” he explained.
“Ang goal kasi natin is to arrest the increase of vape use among the young. And one of the causes of that increase in vape use is the attractiveness of the flavor. Binebenta nila illegal na, iba-ibang flavor pa, talagang tataas yung paggamit ng mga bata,” he explained.
DTI Assistant Secretary Marcus Valdez II said they are still studying it.
DTI Assistant Secretary Marcus Valdez II said they are still studying it.
Department of Health (DOH) Undersecretary Gloria Balboa agreed with Gatchalian and recommended the prohibition of various flavors.
Department of Health (DOH) Undersecretary Gloria Balboa agreed with Gatchalian and recommended the prohibition of various flavors.
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She said based on a survey of the Food and Nutrition Research Institute (FNRI), from 2019 to 2023, vaping adults increased from 1.4% to 9.9%, while vaping adolescents jumped from 7.5% to 39.9%.
She said based on a survey of the Food and Nutrition Research Institute (FNRI), from 2019 to 2023, vaping adults increased from 1.4% to 9.9%, while vaping adolescents jumped from 7.5% to 39.9%.
Balboa sees the unregulated use of vaping, different flavors, and extensive marketing as reasons for the increase.
Balboa sees the unregulated use of vaping, different flavors, and extensive marketing as reasons for the increase.
“The government is losing on all fronts both in terms of public health and revenue because vapes are being taxed cheaper than tobacco,” Balboa said.
“The government is losing on all fronts both in terms of public health and revenue because vapes are being taxed cheaper than tobacco,” Balboa said.
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To curb the illicit trade, the DOH recommended strengthening excise tax measures for tobacco and vapor products.
To curb the illicit trade, the DOH recommended strengthening excise tax measures for tobacco and vapor products.
Gatchalian also recommended imposing a single tax rate on all vapor products and ad valorem tax on vaping devices.
Gatchalian also recommended imposing a single tax rate on all vapor products and ad valorem tax on vaping devices.
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Independent health reform advocate Dr. Anthony Leachon said, “The win-win solution is actually to increase the tax rates both for tobacco and also for vape since the target population for the vape will be the younger population.”
Independent health reform advocate Dr. Anthony Leachon said, “The win-win solution is actually to increase the tax rates both for tobacco and also for vape since the target population for the vape will be the younger population.”
“If we start increasing the tax rates at the same level of rigor with the vape, then we actually can prevent the onslaught of noncommunicable diseases,” he added.
“If we start increasing the tax rates at the same level of rigor with the vape, then we actually can prevent the onslaught of noncommunicable diseases,” he added.
These noncommunicable diseases include heart attack, cancer, and stroke.
These noncommunicable diseases include heart attack, cancer, and stroke.
Philippine College of Physicians President Dr. Imelda Mateo appealed to Gatchalian to not approve House Bill 11360.
Philippine College of Physicians President Dr. Imelda Mateo appealed to Gatchalian to not approve House Bill 11360.
“What we are after in the Committee is to combat and eliminate illicit trade,” Gatchalian said. “And in those hearings we did not see that lowering down taxes can combat illicit trade effectively.”
“What we are after in the Committee is to combat and eliminate illicit trade,” Gatchalian said. “And in those hearings we did not see that lowering down taxes can combat illicit trade effectively.”
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“Habang ako po ang Chairman ng Committee on Ways and Means, hindi ko papayagan na maipasok yang cigarette component in the bicameral conference committee,” he remarked.
“Habang ako po ang Chairman ng Committee on Ways and Means, hindi ko papayagan na maipasok yang cigarette component in the bicameral conference committee,” he remarked.
“With all due respect to our counterparts, and let me put this on record, to our House counterparts, kung yan ang ii-insist nila, mag-usap na lang tayo sa 20th Congress because we will not allow that.”
“With all due respect to our counterparts, and let me put this on record, to our House counterparts, kung yan ang ii-insist nila, mag-usap na lang tayo sa 20th Congress because we will not allow that.”
Gatchalian wants to come up with a unitary tax system on vape products.
Gatchalian wants to come up with a unitary tax system on vape products.
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