BIR, industry back unified vape juice tax to curb misdeclaration

By Kenneth Christiane L. Basilio, Reporter

AUTHORITIES and industry stakeholders on Monday backed a proposal to unify the excise tax structure for electronic vape juices, as lawmakers seek to plug regulatory gaps and boost government revenues amid tapering collections under the current system.

The House of Representatives Committee on Ways and Means is reviewing six bills that seek to simplify the tax system for vape juices.

House Ways and Means Committee Chairman and Marikina Rep. Romero “Miro” S. Quimbo sought the position of tax collection agencies and industry representatives, who supported moves to streamline the current regime that applies two different rates depending on the product.

“A uniform rate would make it easier in terms of tax administration and tax enforcement,” Bureau of Internal Revenue (BIR) Assistant Commissioner James H. Roldan told lawmakers.

The Philippines applies an excise tax rate of P60.20 per milliliter (mL) for salt nicotine while freebase nicotine products are levied with a P6.49 per mL, and both are subject to a 5% increase yearly.

House Senior Deputy Speaker and South Cotabato Rep. Ferdinand L. Hernandez, who authored a proposal seeking a unified P10 per mL tax on all vape juices,

described the current excise regime as “no longer workable, adding it has allowed importers to evade duties by declaring products under the cheaper rate.”

“Two liquids that look and function the same should not be taxed differently,” he told the congressional panel.

Government collections from excise taxes on vape products have diverged sharply, with revenues from conventional freebase nicotine steadily rising as collections from salt nicotine remained sluggish.

Revenues from excise taxes on freebase vape juices have surged to P857.3 million in 2024 from P50.42 million in 2023 and P450,000 in 2022, based on a Finance department presentation to the House committee.

The government has collected P1.85 billion from freebase juices in the January-to-October 2025 period, it showed.

Meanwhile, collections on salt nicotine products fell sharply to P84.72 million from the January-to-May 2024 period, from P173.31 million in 2023 and P137.77 million in 2022.

Finance Undersecretary Karlo Fermin S. Adriano said there were no data on salt nicotine collections since June 2024 after its trading was suspended during the period.

“We are also coordinating with BIR to clean up the data,” he told lawmakers.

Japan Tobacco International supports moves to rationalize and simplify the excise tax structure for vape liquids to curb illicit trade that undercuts legitimate manufacturers, its Fiscal and Regulatory Affairs Director Mario Tan Zinampan said.

“Differentiated tax treatment across similar products creates opportunities for misclassification and regulatory arbitrage, enabling certain products to be declared under lower tax categories,” he told lawmakers.

“Harmonizing the tax treatment of vapor products is, therefore, a necessary measure to prevent tax avoidance and to ensure a level playing field,” he added.

Mr. Zinampan recommended that vape juice tax rates be set equally with heated tobacco products, which currently face a P37.63 tax per pack of 20 units, based on 2026 excise tax rates by the Bureau of Customs.

Nicotine salts contain higher levels of nicotine and are more easily absorbed by the body than freebase vape juices, but both are deadly, pulmonologist and tobacco cessation expert Maricar B. Limpin said. 

“Both are equally harmful,” she told lawmakers.

Anton Ari Israel, president of the Nicotine Consumers Union of the Philippines, said unifying the rates on vape liquids would encourage smokers to switch to vaping products, which were originally intended to help people quit cigarettes.

“This way, confusion can be avoided and the momentum of smokers shifting to alternatives designed to reduce the harm caused by burning tobacco can be maintained,” he said in Filipino.