The Bureau of Internal Revenue (BIR) is developing a digital track-and-trace system that will allow consumers and regulators to verify the authenticity of vape products and other excisable goods using QR codes readable by any smartphone.
The initiative is part of the agency’s efforts to curb the proliferation of smuggled and unregulated vape products, which continue to evade taxes and pose risks to public health.
BIR Commissioner Romeo Lumagui Jr. announced the initiative during the Kapihan sa Manila Bay forum held this week, noting that the new system is meant to assist both government enforcement efforts and law-abiding businesses.
“Even businessmen gusto sanang mag-comply, kasi may nahuhuli kaming ganiyan eh, na sasabihin nilang sir hindi naman namin alam na peke itong mga stamps. We get from these wholesalers [who do not know] these products are counterfeit,” explained Lumagui.
Lumagui estimated that stopping the sale of illicit vape products could help the government recover significant losses.
The BIR chief warned that billions of pesos in revenue are being lost due to illegal vape operations, adding that enforcement efforts have becoming challenging due to the tactics retailers utilize to hide unregistered products from inspectors.
“Just last May, the whole month of May, we visited thousands of shops nationwide just to make sure. Nationwide, simultaneously ‘yung mga vape shops,” shared Lumagui.
According to the lawyer, “nakatago naman, meron silang secret menu… sa mga drawers and stock room nila, nandoon nakatago ‘yung mga illicit vape products.”
He estimated that stopping the sale of illicit vape products could help the government recover significant losses.
“It could help us substantially [if we meet] our target, kapag ma-address… ‘yung mga vape products na ito. Dahil sa nakikita pa lang natin, ilang bilyon na agad ‘yan e. Several billions of pesos ang nawawala d’yan.”
Lumagui acknowledged that enforcement is further challenged by the rapid shift from cigarettes to vape products, particularly among the youth.
The BIR chief warned that billions of pesos in revenue are being lost due to illegal vape.
He pointed out that “vape is a relatively new industry. From 2022 onwards, wala tayong nakokolekta d’yan sa vape… a lot of vape retailers really don’t know that it’s subject to excise tax.”
In response, the BIR is not only intensifying on-the-ground enforcement but is also encouraging citizen participation by opening reporting channels and providing incentives to those who report illicit trade under the BIR’s existing reward system.
“We let the public know that they can report these. There is also a reward under the law… kapag nakakoleta tayo,” Lumagui said, noting that some traders have started using residential areas as distribution points to avoid detection.
“Hindi namin ito titigilan. Patuloy ang gagawin naming operations. Kaya sana mag-comply na lang kayo dahil mas maganda mag-comply, makakatulong kayo sa bansa, makakanegosyo kayo nang tahimik.”
