Lazada, Shopee urged to heed ultimatum to purge illicit vape sellers

Consumer groups asked Lazada and Shopee to purge sellers of unregistered vapes and heated tobacco products (HTPs) on their platforms by end of October 2023 as they committed to the Bureau of Internal Revenue (BIR).


Anton P. Israel, president Nicotine Consumers Union of the Philippines Inc. (NCUP)

“Lazada and Shoppe should follow through with their commitment to purge all unregistered sellers of illicit vape to ensure consumers are protected from dubious products,” Nicotine Consumers Union of the Philippines Inc. (NCUP) president Anton P. Israel said.

Israel’s statement came after BIR Commissioner Romeo D. Lumagui Jr. disclosed to Philippine Medical Association (PMA) president Dr. Maria  Minerva P. Calimag on July 10, 2023 that “Lazada and Shopee's commitment is to purge all unregistered sellers on their platform before the end of October 2023,” when the agency met with the e-commerce platforms to discuss the Vape Law, which requires the registration of vapes, heated tobacco and other novel tobacco products sold online.

The PMA earlier raised concern on illicit trade of vaporized nicotine and non-nicotine products particularly in online platforms. In a letter to Senator Pia S. Cayetano on March 15, 2023, the PMA said the recent inquiry on non-compliant vapor products by the Senate Committee on Sustainable Development Goals, Innovation and Futures Thinking had exposed the huge presence of illicit vapor products in the Philippine market, particularly those found in online platforms such as Shopee, Lazada and Facebook Marketplace.

The NCUP and the Consumer Choice Philippines (CCP) revealed that illicit vapes are still available in the e-commerce platforms in violation of Republic Act No. 11900, or the Vaporized Nicotine and Non-Nicotine Products Regulations Act, which aims to regulate vapes and HTPS for the protection of the public while providing adult smokers better alternatives to cigarettes.

The consumer groups previously appealed to the Department of Trade and Industry to enforce RA 11900 by imposing administrative sanctions or filing court cases against Shopee and Lazada for continuously selling unregistered vapes on their platforms.

In his response to PMA, Lumagui noted that the BIR conducted several dialogs/follow-up meetings with Lazada and Shopee on January 5, 2023; February 9, 2023; and April 13, 2023 on the implementing rules and regulations of RA 11900 to seek their assistance in reaching out to the sellers of the said products and inform them of their tax obligations.

“A quick check on these online sites would show various postings of tobacco and vapor products without the appropriate Philippine Graphic Health Warnings and sold at very cheap prices notwithstanding the excise taxes levied on these products. In addition, and as the good Senator would know coming from the Senate hearing, most of the vapor products found online as well as in stores and vape shops do not comply with the provisions of Republic Act No. 11900 or the Vaporized Nicotine and Non-Nicotine Products Regulations Act. They contain flavor descriptions and are packaged in ways that unduly appeal to minors,” the PMA said.

It said there is no way to verify if the products sold are registered and paid the correct taxes with the BIR as they do not bear the internal revenue stamps nor the required packaging or labeling requirements.

“We are bedazzled why these non-compliant, unregistered, and possibly non-tax paid tobacco and vapor products are allowed to be openly advertised, sold and distributed in the local market, especially online,” the PMA said.

It said illicit and unregistered tobacco and vapor products evade regulatory oversight, leaving the public in danger.

The BIR said it issued Revenue Regulations No. 14-2022 dated October 24, 2022 on the rules and regulations implementing provisions of RA 11900 relative to importation, manufacture, sale, packaging, distribution, use and communication of VNNPs and novel tobacco products.

It also filed a criminal complaint on December 13, 2022 against five individuals whose businesses in Manila were caught selling smuggled and untaxed vape products. The BIR said it also conducted its first nationwide raid on illicit cigarettes on January 25, 2023.

The BIR said it conducted a briefing for online sellers and merchants in e-commerce platforms on April 18, 2023 to inform them of their basic tax obligations and compliance requirements and issued RMC No. 49-2023 dated April 25, 2023 to update the floor price of cigarettes, heated tobacco and VNNPs.

The agency also issued RMC No. 57-2023 dated May 16, 2023 which the updated the list of registered manufacturers/importers/exporters with corresponding product brands/variants of cigarettes, heated tobacco products, vapor products and novel tobacco products.

On June 8, 2023, the BIR said it conducted an online seminar on the provisions of RMC No. 49-2023 for merchants/sellers of tobacco products.

The Bureau also held a meeting with Bytendance Philippines Inc. (Tiktok) and Facebook Philippines representatives on June 7 and July 6, 2023, respectively to discuss the provisions of RA 11900.

“The BIR expresses its gratitude to the medical community for its advocacy and invaluable support toward a safer and healthier Philippines. We welcome this collaboration to promote the interest and welfare of the Filipino people,” Lumagui said in the letter to the PMA.

The PMA said raising the issue on illicit tobacco and vapor products and calling for the full implementation of the tax and regulatory laws is crucial to protecting the interests of the government and the public.

The medical group expressed hope that Senator Cayetano would be able to convince the Department of Interior and Local Government as well as local chief executives to actively campaign against illicit vapor products, including those found in e-commerce platforms Shopee, Lazada and Facebook Marketplace whose headquarters or Philippine offices are all based in Taguig City.

“Further, we ask that the committee and your good office task the Bureau of Internal Revenue and the Bureau of Customs to combat the continued evasion and smuggling of these illicit products to the detriment of the public health and public finance,” it said.