Strengthening Enforcement to Curb Illicit Trade
The Senate Committee on Ways and Means recently emphasized that reducing taxes is not the effective solution to curb the illicit tobacco trade. Instead, they advocate for stronger enforcement as the best approach to combat these illegal activities. This viewpoint was highlighted during the committee’s public hearing on House Bill No. 11360, which proposes lowering excise taxes on cigarettes, tobacco, heated tobacco, and vapor products.
The bill aims to address the decline in tax revenues caused by the current Sin Tax Law, formally known as Republic Act No. 10351. This law increased taxes on harmful products such as alcohol, tobacco, and sugary drinks to discourage their consumption and protect public health. However, concerns have risen over the growth of smuggling and illicit trade undermining these efforts.
Focus on Enforcement Over Tax Reduction
Committee leaders stressed that improving prosecution rates and supporting law enforcement agencies remain crucial. “I’ll give credit where credit is due. Our enforcement agencies have been working tirelessly to apprehend smugglers and illegal cigarettes in our country. However, if we don’t prosecute them, then nothing is going to happen,” a senior official pointed out.
They also suggested introducing new mechanisms, like providing incentives for enforcement bodies, to tackle the smuggling of vaping products, which has become increasingly common. This illegal trade is especially worrying because it targets the adolescent population. According to reports, the cheaper importation of vape goods has contributed to a sharp rise in their use among youth.
Addressing the Rise of Vaping Among Youth
The committee paid special attention to vapor products during the hearing. Although applying a unified tax rate on vapor products and an ad valorem tax on devices might help control their use, experts agree that the key to stopping illicit trade lies in stronger law enforcement.
“It will come from strengthening our enforcement. It will come from giving incentives to our enforcement agencies and also mobilizing our LGUs (local government units). As well as, of course, winning the cases. Without winning the cases, nothing’s going to happen,” the official reiterated.
Regulatory Gaps and Calls for Action
The Department of Trade and Industry (DTI) was urged to step up its role in regulating vape products, as current efforts appear insufficient. Data reveals that about 40 percent of adolescents are vaping, a drastic increase from just seven percent five years ago. Alarmingly, there are no toxicology reports detailing what substances these young users are consuming.
“So please submit to the committee an action plan and we will not take this lightly. We will further grill you on this especially since the budget season is near. So make sure that you submit to us a credible, feasible and effective action plan,” the official demanded.
Health Advocates Oppose Tax Reductions on Harmful Products
Meanwhile, health advocates strongly oppose lowering excise taxes on tobacco and vapor products. They emphasize that sin taxes serve as a vital tool to protect public health by discouraging the use of harmful and addictive substances, especially among young people.
One advocate lamented how the Vape Law, or Republic Act No. 11900, reversed important protections established under the Sin Tax Reform Act. The result has been dubbed the “vapedemic,” with increased health risks due to less regulation.
“We should not repeat the mistakes of the Vape Law, which stripped away critical regulatory protections established under the Sin Tax Reform Act. We must not allow history to repeat itself,” the advocate stressed.
Reducing taxes, they argue, not only fails to address the health costs associated with these products but also weakens government funding for essential health programs, including Universal Health Care, which relies heavily on sin tax revenues.
Maintaining Policy Focus for Public Health
Supporters of the current tax framework welcome the committee’s stance that illicit trade is best tackled through enforcement rather than tax cuts. “The goal of our Sin Tax laws has always been clear—to discourage the use of harmful products and protect the health of every Filipino,” an official said.
Moving forward, they urge lawmakers to prioritize policies that truly safeguard the well-being and future of all Filipinos, especially the youth.
For more news and updates on illicit tobacco trade, visit Filipinokami.com.