Philippines Intensifies Crackdown on Illicit Vape Trade Amidst Rising Tax Evasion Concerns

In a decisive move to combat the burgeoning illicit trade of electronic cigarettes and vapor products, the Philippine Bureau of Internal Revenue (BIR) has intensified its enforcement actions. Recent operations have led to the seizure of 18,811 illegal e-cigarette products and counterfeit tax stamps, amounting to an estimated tax loss of ₱36.51 million (approximately $650,000) .2firsts.com

Escalating Enforcement Actions

On May 30, 2025, a joint operation by the BIR and the National Bureau of Investigation’s Organized and Transnational Crime Division targeted clandestine vape distribution hubs in Guiguinto, Bulacan. The raids uncovered 4,789 nicotine salt devices and 14,022 conventional e-cigarettes, alongside counterfeit tax stamps and unregistered disposable vapes. These findings underscore the sophisticated methods employed by illicit traders to evade taxation and regulation.diskurso.ph

BIR Commissioner Romeo Lumagui emphasized the agency’s commitment to eradicating illegal vape trade, stating, “We will not relent in our efforts to dismantle these illicit operations, whether they operate online or offline.” He further highlighted the public health implications, noting that the seized products could potentially supply over 4,700 minors for a month, posing significant health risks .manilastandard.net+2bworldonline.com+2diskurso.ph+2 2firsts.com

Financial Implications of Illicit Trade

The Philippine government faces substantial revenue losses due to the illicit trade of tobacco and vapor products. In 2024, the estimated tax leakage from misdeclared vapor products reached ₱14.84 billion, contributing to a total projected loss of ₱54.1 billion in 2025 . The Bureau of Customs reported a significant increase in seizures, from 131 cases in 2021 to 318 cases in 2024, valued at approximately ₱9.19 billion .philstar.com+4bworldonline.com+4bworldonline.com+4 bworldonline.com+2diskurso.ph+2web.senate.gov.ph+2

These figures highlight the urgent need for stringent enforcement and regulatory measures to curb the proliferation of untaxed and potentially harmful vape products in the market.

Regulatory Measures and Compliance

In response to the escalating illicit trade, the BIR mandated the use of internal revenue stamps on all vape products effective June 1, 2024. This measure aims to ensure proper tax compliance and facilitate the identification of legitimate products . Non-compliance with this requirement subjects businesses to product seizures and potential criminal liability for tax evasion.web.senate.gov.ph+5manilastandard.net+5qa.philstar.com+5 qa.philstar.com+1manilastandard.net+1

Additionally, the Vaporized Nicotine and Non-Nicotine Products Regulation Act (Republic Act No. 11900) was enacted to regulate the importation, manufacture, sale, and distribution of vaporized nicotine and non-nicotine products. The law seeks to protect public health and ensure that these products are appropriately taxed and monitored .en.wikipedia.org

Industry Growth Amidst Challenges

Despite regulatory efforts, the vape industry in the Philippines continues to grow. A study by Grand View Research valued the Philippine e-cigarette and vape market at $113.6 million in 2023, with an expected compound annual growth rate of 18.7% from 2024 to 2030 . The increasing popularity of fruit-flavored vapes and aggressive marketing strategies contribute to this growth, particularly among the youth.philstar.com

However, this growth also presents challenges in ensuring that products are safe, appropriately taxed, and kept out of the hands of minors. The government faces the dual task of supporting industry growth while implementing effective regulatory measures to protect public health and revenue.

Conclusion

The Philippine government’s intensified crackdown on illicit vape trade underscores the seriousness of the issue. With significant revenue losses and public health risks at stake, comprehensive enforcement and regulatory strategies are imperative. As the industry continues to evolve, balancing growth with responsible regulation will be key to ensuring the well-being of consumers and the integrity of the market.diskurso.ph+1philstar.com+1