The House of Representatives Committee on Ways and Means, chaired by Albay Representative Joey Salceda, met on Tuesday to discuss the unnumbered substitute bill to House Bill (HB) 10329, which aims to combat the illegal tobacco trade by enforcing strict and varying penalties based on the level of involvement in the activity.
Salceda explained that illicit trade leads to a decline in tobacco tax revenues that were supposed to be channeled into the implementation of Republic Act (RA) 11223, or the Universal Health Care Act, according to his explanatory note for HB 10329.
He underscored that the illegal trade weakens government institutions and contributes to criminal activities.
Jericho Nograles, a former lawmaker and president of the Philippine Tobacco Institute (PTI), stated that the illicit tobacco trade is increasing by 3% to 8% each year. He revealed that 51% of the cigarette supply in Mindanao is sourced illegally, with some regions seeing up to 90% of cigarettes being obtained through illegal means. In northern and central Luzon, the illegal trade represents 12.8% of the cigarette supply, while in southern Luzon, it accounts for 5.4%.
Regarding the issues surrounding the illegal trading of tobacco, PTI proposed amending the tax system to identify an ideal tax rate that balances revenue generation with discouraging consumption. They also suggested applying a uniform tax rate across all vapor products and adopting a comprehensive government strategy that includes the Bureau of Customs, Bureau of Internal Revenue, Department of Trade and Industry, local government units, and other relevant agencies.
“We also suggest that the DOJ (Department of Justice) relentlessly prosecute illicit importers, manufacturers, and traders,” Nograles said.
Former health secretary and Iloilo Rep. Janette Garin concurred that taxes should be applied to higher-quality e-cigarettes and vaping products to deter the use of unregulated devices, particularly among students and young workers. She highlighted the growing trend of vaping and e-cigarette use among the youth.
“The new generation, they would go by what is in. So, mas sosyal ang dating ng nagve-vape o nag-e-ecigarette kesa doon sa sigarilyo,” Garin said.
Meanwhile, Deputy Speaker Kristine Singson-Meehan proposed adding a provision to the bill that “acknowledges the need to protect legitimate businesses in order to ensure the prompt and proper payment of government taxes on tobacco products”.