DOF's stronger tax collection efforts garner approval
At A Glance
- E-cigarette and vape manufacturers and distributors in the country have expressed their support for the Department of Finance's (DOF) plans to enhance the efficiency of tax collection and to pursue individuals or entities evading taxes, particularly those involved in the vapor products sector.<br>Joey Dulay, the President of the Philippine E-cigarette Industry Association (PECIA), said the industry group is committed to abide by the regulations set by the government.<br>Newly appointed Finance Secretary, Ralph G. Recto, recently announced the government's objective to raise a total of P4.3 trillion in tax and non-tax revenues for the current year.<br>In an effort to bolster revenue collections, Recto has emphasized the necessity of instituting a more efficient tax administration system, a component of which involves actively pursuing and penalizing tax evaders.<br>Dulay said that PECIA has established internal mechanisms to ensure that its members dutifully fulfill their tax obligations, and further expressed the industry's openness to collaborating with government authorities to address any concerns that may arise.
E-cigarette and vape manufacturers and distributors in the country are in favor of the Department of Finance's (DOF) efforts to improve tax collection efficiency and pursue tax evaders, including those involved in the vapor products sector.
In a statement, Joey Dulay, Philippine E-cigarette Industry Association (PECIA) president, said the industry group is fully committed to complying with government regulations, including those covering the so-called "sin" industries.
In particular, Dulay said that PECIA members adhere to both Republic Act (RA) No. 11900, also known as the Vaporized Nicotine and Non-Nicotine Products Regulation Act, and RA 11467, which has increased sin tax rates annually since 2020.
However, an ongoing investigation by the House Committee on Ways and Means revealed that one popular vape brand has not only been aggressively promoting its vaping devices to minors through social media but also evading much-needed tax payments to the government.
"We take any allegations of under declaration seriously and are dedicated to upholding transparency and accountability within our members," Dulay said.
"And while we have no direct control among non-members in the industry, we continually remind and cascade through our information channels news and facts about compliance," he added.
To recall, the House panel had found out after laboratory testing that one vaping brand supposedly underdeclared its imports from China by labeling them as having freebase nicotine, rather than nicotine salt, as ingredient.
The prevailing excise tax on freebase nicotine is lower than the levy on nicotine salt found in the brand’s vapes.
Cagayan de Oro City Second District Rep. Rufus Rodriguez had estimated more than P800 million in taxes allegedly unpaid by that specific brand.
Rodriguez, who leads the probe in the Lower House, had lamented that these foregone tax revenues unfortunately shortchange the government -- in particular, funds intended for universal health care which grant medical access to all Filipinos through the state-run Philippine Health Insurance Corp.
Sin taxes generated from tobacco, e-cigarettes and alcoholic drinks mainly fund the government's universal health care program.
Newly appointed Finance Secretary Ralph G. Recto last week said that under his watch, the government targets to collect a total of P4.3 trillion in tax and non-tax revenues this year. This is on top of borrowing P2.4-2.5 trillion in 2024 to finance the national budget.
To shore up revenue collections, Recto wants a more efficient tax administration system, which can partly be done by running after and penalizing tax evaders.
"PECIA has established internal mechanisms to ensure members adhere to tax obligations, and we are open to collaborating with government authorities to address any concerns," Dulay said.
"Rest assured, we prioritize lawful practices to contribute positively to the nation's revenue goals," according to Dulay.