THE Bureau of Internal Revenue (BIR) said it will require importers of raw materials for vaping products to seek special clearances to release their shipments, citing the need to impose order on an industry with many emerging players.

“For vape products, we are going to require them to (apply for) the authority to release imported goods for raw materials,” BIR Commissioner Romeo D. Lumagui, Jr. told reporters on the sidelines of a briefing last week.

“We are thinking of ways to regulate because there are so many vape products now. The production of vape products is a backyard industry, so we’re thinking of ways to regulate it,” he added.

In its latest revenue memorandum circular, the BIR announced that it is now requiring importers or manufacturers of raw materials and equipment used to make heated tobacco products and vapor products to apply for an authority to release imported goods.

“The raw materials specially used for the manufacture of heated tobacco products and vapor products shall include but are not limited to: propylene glycol, vegetable glycerin, organic sweetener, artificial flavoring, and nicotine,” according to the circular.

Devices used for the manufacture of these products will also include but are not limited to mechanical or electric heating elements/atomizers, circuits, cartridges, reservoirs, pods, tanks, mods, and mouthpieces.

Apart from the authority to release imported goods, importers and manufacturers must also apply for a permit to operate.

Mr. Lumagui said that the BIR is working on addressing the shortfall from excise tax collections, which is mainly due to illicit tobacco.

“We’re targeting to minimize that 20% (shortfall). Within the year, we can cut that by more than half… ultimately, I want to make sure to fully resolve that shortfall,” he said.

The BIR expects to collect P2.64 trillion in revenue this year, of which P336 billion will come from excise taxes. Excise tax collections from tobacco products are expected to hit P169.8 billion.

“The demand for tobacco products is going down. I’m not sure if it’s really going down because of the proliferation of illicit products. What we’re monitoring is legitimate cigarette products, where we see a decrease in volume,” Mr. Lumagui said.

“Total consumption is what we have to look into, if consumption is really going down or if it’s just transitioning to vape products. Vape products (are) very easy to manufacture,” he added.

The Bureau of Customs estimates that seizures of illicit cigarette and tobacco products amounted to P1.89 billion as of the end of July.

In May, the BIR filed 69 complaints valued at P1.8 billion against tobacco traders for tax evasion. It also filed a P1.2-billion tax evasion case against five vape traders in December. — Luisa Maria Jacinta C. Jocson