Gatchalian flags P50-billion revenue leakage from the illicit trade of cigarette, vapor products

PHILIPPINES, February 6 - Press Release
February 6, 2025

Gatchalian flags P50-billion revenue leakage from the illicit trade of cigarette, vapor products

Senator Win Gatchalian flagged an estimated P50-billion revenue leakage in 2024 due to the increasing illicit trade in cigarettes and the misdeclaration of vapor products.

Of the estimated total tax leakage last year, the illicit trade of cigarettes alone resulted in a revenue leakage of P34.37 billion. The misdeclaration of vapor products accounted for P14.84 billion in tax leakages, while the illicit trade in heated tobacco products contributed P840 million in tax leakages. These figures from the Senate Committee on Ways and Means were based on data from the Bureau of Internal Revenue (BIR).

"This is a cause for concern because illicit trade not only results in revenue loss for the government but also exacerbates health risks associated with smoking and vaping," said Gatchalian, chairperson of the Senate Committee on Ways and Means.

The estimated excise tax leakages due to the illicit trade of cigarettes and misdeclaration of vapor products increased from P13.9 billion in 2019, P26.3 billion in 2020, P32.5 billion in 2021, P39.3 billion in 2022 and P48.3 billion in 2023.

Meanwhile, tax leakage due to illicit trade is projected to reach P54.1 billion this year, increasing further to P58.2 billion in 2026, P62.1 billion in 2027, and P65.9 billion by 2028.

Gatchalian emphasized it is imperative for the government to address illicit trade, which makes cigarettes and vapes affordable to price-sensitive groups like adolescents.

Addressing illicit trade would not only improve the collection of excise tax from cigarettes and vapes but could also deter smoking and vaping among young people, he said.

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Gatchalian naalarma sa P50-bilyong revenue leakage mula sa illicit trade ng sigarilyo at vapor products

Naalarma ni Senador Win Gatchalian sa tinatayang P50-bilyong tax leakage noong 2024 dahil sa pagtaas ng illicit trade o bawal na pangangalakal ng mga produktong sigarilyo at vape.

Sa tinatayang kabuuang tax leakage noong nakaraang taon, ang ilegal na kalakalan ng sigarilyo ay nagresulta sa P34.37 bilyong kawalan ng kita ng gobyerno. Ang misdeclaration ng vapor products naman ay nagdulot ng tax leakage na aabot sa P14.84 bilyon, habang umaabot naman sa P840 milyon ang nawalang kita ng gobyerno sa illicit trade ng heated tobacco products. Ang mga numerong ito mula sa Senate Committee on Ways and Means ay batay sa datos ng Bureau of Internal Revenue (BIR).

"Nakakabahala na ang illicit trade ay hindi lamang nagreresulta sa kawalan ng kita ng gobyerno, nagpapalala din ito ng mga panganib sa kalusugan na nauugnay sa paninigarilyo at vaping," sabi ni Gatchalian, chairperson ng Senate Committee on Ways and Means.

Ang tinatayang excise tax leakages dahil sa illicit trade ng mga sigarilyo at misdeclaration ng mga vapor products ay tumaas mula sa P13.9 bilyon noong 2019, P26.3 bilyon noong 2020, P32.5 bilyon noong 2021, P39.3 bilyon noong 2022 at P48 .3 bilyon noong 2023.

Samantala, inaasahang tataas pa ang tax leakage dahil sa illicit trade ng mga sigarilyo at vapor products. Nakikitang aabot ito sa P54.1 bilyon ngayong taon, na tataas pa sa P58.2 bilyon sa 2026, P62.1 bilyon sa 2027, at P65.9 bilyon sa 2028.

Binigyang-diin ni Gatchalian na mahalaga para sa gobyerno na tugunan ang ilegal na kalakalan, na nagpapadali sa pagbili ng mga sigarilyo at vape ng mga grupong sensitibo sa presyo tulad ng mga kabataan.

Ang pagtugon sa ilegal na kalakalan ay hindi lamang magpapabuti sa koleksyon ng excise tax mula sa sigarilyo at vape, kundi maaari ring makapigil sa paninigarilyo at paggamit ng vape ng mga kabataan, aniya.