ELECTRONIC cigarettes (e-cigarettes) must be classified as an industry of its own under the Philippine Statistics Authority (PSA) to ensure that its economic activities are monitored and appropriately taxed, a congressman said on Tuesday.
During the House Ways and Means Committee meeting, panel chair and Albay Representative Jose Ma. Clemente S. Salceda pointed out that e-cigarettes are not yet classified under the Philippine Standard Industrial Classification (PSIC) of the PSA and, as such, “could make monitoring of their activities more difficult.”
In light of the Bureau of Customs’ seizure of P1.43 billion worth of allegedly smuggled e-cigarettes at a warehouse in Valenzuela City last October, Mr. Salceda outlined a number of proposals to regulate the e-cigarette or vaping industry.
First, he said the Bureau of Internal Revenue (BIR) must uphold a Revenue Office on Premise (ROOP) rule on manufacturers by having a designated ROOP at the place of business and come up with a clear regulatory framework and system of registration for e-cigarette companies.
Mr. Salceda said there must be a distinction between manufacturers, importers, wholesalers, and retailers in order to determine the extent of responsibility for ensuring excise tax payment.
Anticipating a market shift, he said tobacco excise tax revenues are likely to continue to decline with the e-cigarette sector taking a bigger share of the market. “We have an industry report that says by 2027, vapes will be one half of the size of the traditional cigarettes,” he said.
Exploring this new industry’s tax potential, the congressman is batting for a declaration of excisable products from port of departure in order to ensure regulatory control over e-cigarette shipments from the outset. — Beatriz Marie D. Cruz