BIR: Vape regulation to trim excise tax gap

MANILA, Philippines — The Bureau of Internal Revenue (BIR) is banking on the imposition of vape stamps to contribute to the further reduction of the excise tax gap this year.

BIR commissioner Romeo Lumagui said the revenue agency is expecting that the shortfall in excise tax would narrow after it mandated vape sellers to use vape stamps to ensure proper tax collection.

“We are hoping that with the increase in compliance with the vape players, we will be able to cut the gap,” Lumagui told reporters.

“Consumption of cigarettes has been reduced with the shift of consumer preference from tobacco to vape. As long as we can capture that, we can expect a smaller gap,” he said.

The imposition of vape stamps was one of the strategies that the BIR employed to run after vape smuggling especially after many consumers have shifted to vape products.

Unfortunately, it has become difficult for the BIR to go after illegal sellers given that it has become a backyard industry whose production can be done even at home.

The BIR mandated in June last year the fourth generation internal revenue stamps for all imported and locally manufactured vape products.

Lack of internal revenue stamps means non-payment of excise taxes, which will result in the seizure of vape products and the possible filing of tax evasion cases.

However, Lumagui has yet to say how big of an impact the vape stamps would be in terms of actually contributing to excise taxes.

Last year, total excise taxes rose by 3.86 percent to P303 billion.

While this was 6.7-percent below the collection goal of P325 billion, it was a significant improvement from the 13 percent shortfall recorded the previous year.

For 2025, excise tax collection is projected to hit P337.8 billion, up by 11.4 percent.

Excise tax is a levy on the production, sale or consumption of a commodity. It contributes around 12 percent to the overall collection of the BIR.

Excisable products include alcohol, tobacco, sweetened beverages and minerals.

BIR: Vape regulation to trim excise tax gap

Louise Maureen Simeon

MANILA, Philippines — The Bureau of Internal Revenue (BIR) is banking on the imposition of vape stamps to contribute to the further reduction of the excise tax gap this year.

BIR commissioner Romeo Lumagui said the revenue agency is expecting that the shortfall in excise tax would narrow after it mandated vape sellers to use vape stamps to ensure proper tax collection.

“We are hoping that with the increase in compliance with the vape players, we will be able to cut the gap,” Lumagui told reporters.

“Consumption of cigarettes has been reduced with the shift of consumer preference from tobacco to vape. As long as we can capture that, we can expect a smaller gap,” he said.

The imposition of vape stamps was one of the strategies that the BIR employed to run after vape smuggling especially after many consumers have shifted to vape products.

Unfortunately, it has become difficult for the BIR to go after illegal sellers given that it has become a backyard industry whose production can be done even at home.

The BIR mandated in June last year the fourth generation internal revenue stamps for all imported and locally manufactured vape products.

Lack of internal revenue stamps means non-payment of excise taxes, which will result in the seizure of vape products and the possible filing of tax evasion cases.

However, Lumagui has yet to say how big of an impact the vape stamps would be in terms of actually contributing to excise taxes.

Last year, total excise taxes rose by 3.86 percent to P303 billion.

While this was 6.7-percent below the collection goal of P325 billion, it was a significant improvement from the 13 percent shortfall recorded the previous year.

For 2025, excise tax collection is projected to hit P337.8 billion, up by 11.4 percent.

Excise tax is a levy on the production, sale or consumption of a commodity. It contributes around 12 percent to the overall collection of the BIR.

Excisable products include alcohol, tobacco, sweetened beverages and minerals.