SENATOR Sherwin 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.

AUTHOR PROFILE

Camille P. Balagtas