September 15th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) wants the Department of Trade and Industry (DTI) to more strongly crack down on violations of Republic Act No. 11900 or the Vaping Regulation Law, and the excise taxes on vape products, amid reports that some online sales of vapes from abroad are being categorized in online platforms as “toys” and “electronics,” as well as reports that some online purchases from abroad through these sites are not being imposed excise taxes.
“The advocates of the Vaping Regulation Law argued that it was a better way to regulate the sector and supposedly save lives. It also provided rules on the sale of vape online. Well, let’s prove it,” Salceda said.
Salceda said that his congressional staff “did a simple search using the online selling networks just to check how easy it is to buy vape without the age tests, the requirements for graphic health warnings, and other standard specifications.”
“It turns out, it’s very easy to buy vape without any of these requirements,” Salceda said.
Salceda also pointed out that there are online sales of vaping products “that are not even branded.”
“How do you catch a sale that has no brand? How do you apprehend them for violations of the rules that only registered brands and importers can import?” Salceda said
Salceda pointed out that the de minimis rule in the Customs Modernization and Tariff Act, which provides that goods under P10,000 are subject to no duties and are inspected less stringently, is also used as a loophole for importations that skirt taxes.
“When these online stores classify vaping products as toys, or allow sales of unbranded products, then it becomes very easy to import them without paying excise taxes, because most vape sales are under P10,000 anyway,”
Salceda showed screenshots of online shopping networks where vaping products have been classified as “toys” or “electronic accessories.”
Salceda also said that “a blatant and contemptuous way for vaping companies to appeal to younger people is, okay, they make the devices themselves generic-looking, but they wrap them in “cases” that feature cartoons.”
Under Republic Act No. 11900, vaping devices “shall not be targeted to or particularly appeal to persons under eighteen (18) years of age. Markings or characters that are likely to appeal to the youth such as the use of cartoons, anime, manga, animated characters, youth influencers, personalities and the like are prohibited.”
“So, many of them are skirting taxes, they’re marketing to children, and they are selling unbranded goods. And, what’s worse is that there is an extremely vague provision of RA 11900 which gives them a “transition period” of 18 months to comply with the law.”
BIR asked to craft rules for online shopping networks
Salceda has also asked the Bureau of Internal Revenue to craft regulations to fight counterfeits and ensure that imports of vaping products are imposed excise taxes.
“The BIR should impose some degree of accountability on online shopping networks that they are aiding and abetting tax evasion if they sell products that do not comply with excise taxes.”
“I would like rules ensuring that vape is categorized as a restricted product, not as toys or electronics in online shops. That will also help prevent tax evasion and marketing to minors.”
Salceda also wants the Bureau of Customs to exclude vape from the “de minimis” rule.
“The de minimis rule is for generally benign imports. The de minimis rule excludes plenty of products with adverse impacts on health. Vape products are no different.”