Senator Sherwin Gatchalian expressed concern over the widespread smuggling and illicit trade of excisable products, including cigarettes and vapes.
He warned that these activities undermine revenue collection, pose health risks, and threaten peace and order.
“My worry is a reversal in smoking prevalence trends. We previously had a win-win situation where smoking prevalence was decreasing while tax collection was increasing. However, the trend has now reversed. We are now in a lose-lose situation with smoking prevalence rising and tax collection declining,” said Gatchalian.
Data from the Bureau of Internal Revenue revealed a steady decline in excise tax collection, with only P130.9 billion collected from January to November 2024, compared to P134.9 billion in 2023, P160.3 billion in 2022, and P176.5 billion in 2021.
Gatchalian noted that while the cigarette market declined from 103.3 billion sticks in 2014 to 55.6 billion sticks in 2023, the share of illicit trade grew from 12.2% in 2014 to 19.8% in 2023.
“We don’t want the value of illicit trade to surpass that of legitimate entities,” the senator said, pointing out that smokers increasingly turn to smuggled cigarettes due to their lower prices.
“In my opinion, enforcement is not enough. We have to look at the other causes of illicit trade in our country. We cannot ignore the theory of incentives given the significant price difference between illicit cigarettes and legitimate ones,” he added.
“We must recognize the harm this causes – not just in lost revenue but also on health risks, as these activities operate under the radar.”
Gatchalian called for a whole-of-government approach, urging the finance, trade, and health departments to develop a strategy to address the issue.
He also urged law enforcement agencies, including the Philippine National Police and the National Bureau of Investigation to investigate to target the perpetrators behind these illegal activities.IMT
