A consumer group warned the public against the proliferation of unregistered and untaxed cigarettes, heated tobacco and vapor products on e-commerce platforms such as Shopee and Lazada which could be harmful to consumers and deprive government of revenues.
The National Consumers Union of the Philippines Inc. said in separate letters to Shopee Philippines and Lazada Philippines that online merchants should not be allowed to sell illicit products to “protect consumer rights and welfare.”
NCUP president Antonio Israel noted the proliferation of illicit or unregistered tobacco products and vaporized nicotine and non-nicotine products displayed and sold on both Shopee and Lazada.
He said while the COVID-19 pandemic has pushed the use of and reliance on e-commerce platforms, “there has also been a marked increase in illicit products in e-commerce platforms that ultimately harm the rights and welfare of consumers.”
Israel said all sellers, both online and at physical stores, importers and distributors of cigarettes, heated tobacco and vapor products should observe the rules and laws to combat the unintended use of these products and ensure the fair collection of correct government taxes.
This is because illicit and unregistered products evade regulatory oversight, leaving the public in danger of consuming substandard products, he said.
Israel said the Shopee and Lazada platforms play a crucial role in curbing the presence of unauthorized sellers and products.
Copies of the letters were also sent to Rep. Joey Salceda, chairman of the House Committee on Ways and Means; Department of Finance Secretary Benjamin Diokno; Department of Trade and Industry Secretary Alfredo Pascual; Department of Interior and Local Government Secretary Benjamin Abalos Jr.; Bureau of Internal Revenue Commissioner Romeo Lumagui Jr.; and Bureau of Customs Commissioner Yogi Filemon Ruiz.
NCUP is a nonprofit national advocacy organization which believes that the rights and interests of millions of Filipino smokers and vapers alike need to be protected and safeguarded from substandard, unregulated and non-registered tobacco/nicotine products and alternative nicotine products.
The group has been advocating tobacco harm reduction as a potential public health policy solution, especially following the enactment of Republic Act No. 11900 or the Vaporized Nicotine and Non-Nicotine Products Regulation Act which adopts a balanced policy where novel consumer products are properly regulated using internationally-accepted product standards to protect the citizens from the hazards of unregistered and substandard vapor products and heated tobacco products.
“However, such new law is threatened by the presence of illegal products, particularly those in e-commerce platforms and online marketplaces,” said Israel.
He said a quick search on e-commerce platforms and online marketplaces would show numerous listings of products not included in the BIR’s Revenue Memorandum Circular No. 79-2022, which enumerates the list of registered importers or manufacturers and their corresponding products which can be lawfully sold, advertised or distributed in the Philippines.
RMC No. 79-2022 explicitly provides that any product not included in the list, without a BIR tax stamp, without the mandated graphic health warning, and which is lower than the floor minimum prices should be considered as unauthorized/illicit subject to seizure and apprehension.
Israel said RA 11900 is also very clear in providing that the sale or distribution of vaporized nicotine and non-nicotine products, their devices, and novel tobacco products through internet websites or via e-commerce and/or other similar media platforms should only be made by online sellers or distributors registered with the Department of Trade and Industry or the Securities and Exchange Commission.
He said products being sold and advertised online should also be compliant with the health warning requirements as well as other BIR requirements including tax stamp, minimum or floor price or other fiscal marks.
Israel noted that as early as September 2022, Rep. Joey Salceda, chair of the House Committee on Ways and Means, “demanded that the Department of Trade and Industry run after untaxed, imported vaping products that are being passed off as “toys” and “electronics” on online selling platforms”. Salceda asked authorities “to step up the enforcement of Republic Act No. 11900”.
Israel said further aggravating the issue is the recent proposal to increase the tax on vapor products, including vape devices. “This would make it more difficult, if not impossible, for legal-aged smokers to quit the habit of smoking and switch to better alternatives. The proposal to increase the taxes not only unduly hampers the chance of legal-aged smokers and adult nicotine product consumers to enjoy better alternatives but will also lead to more black-market activities,” he said.