MANILA, Philippines—The government is inclined to adopt the proposed single tax rate for vapor products to address regulatory gaps and boost revenue collections.
The unified support for a simplified vape tax cropped up during Monday's hearing of the House Committee on Ways and Means chaired by Marikina Rep. Miro Quimbo, in the process of consolidating six measures that seek to simplify the taxation process for vape products.
Discussed by the committee were House Bill (HB) 1316, 2618, 5207, 5212, 5364, and 6993, all targeting excise tax restructuring for vapor products.
Representatives from the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), the top two revenue generating agencies of the government, as well as the Department of Trade and Industry (DTI) agreed to simplify the excise tax system for vapor products, citing enforcement difficulties, technical limitations, and revenue risks under the current framework.
The move was likewise supported by the Department of Health (DOH), Food and Drug Administration, Philippine Heart Center and industry stakeholders.
During the committee deliberation, officials cited weaknesses in the current two-tier system which pegged a much higher tax for nicotine salt vapes at P60.20 per milliliter compared to only P6.95 milliliter for freebase nicotine products.
Deputy Speaker Kristine Singson-Meehan, author of HB 5207, pointed out the tax disparity between nicotine salt vapes and freebase nicotine products.
Singson-Meehan said that the measure seeks to plug the excise tax loophole while advancing public health objectives.
Senior Deputy Speaker Ferdinand Hernandez, author of HB 5212, said the two-tier system is no longer viable because it only leads to misdeclaration which led to billions of pesos in lost revenues.
“The two-tier system has opened the door to misdeclaration and loopholes, costing us P14.84 billion in lost revenues in allowing products to circulate without proper oversight. Two liquids that look and function the same should not be taxed differently,” Hernandez said.
Both the BIR and BOC admitted that they lack the technical capability to verify whether products contain nicotine salt or freebase nicotine, which led importers to declare the product with lesser tax.
Lawmakers noted that salt nicotine products virtually “disappeared” from tax records in 2024 and 2025, as companies reported zero withdrawals and shifted to freebase nicotine.
The BOC said it relies on DTI documentation, while Finance Undersecretary Carlo Adriano highlighted the drop in salt nicotine removals and the projected P2.3 billion revenue from vapor products in 2025, noting the shift to the lower-taxed category.
DOH and FDA officials clarified that while nicotine salt allows faster absorption, there is no established evidence showing it is significantly more harmful than freebase nicotine, questioning the scientific basis for the tax difference.
