House leader seeks unitary tax for vape products; tobacco company agrees

House ways and means panel chairperson and Marikina Second District Representative Romero "Miro" Quimbo called for a uniform tax rate on vape products on Monday, saying that the current system has resulted in increased health risks for the products' main target market: the youth. 

Quimbo cited data from the state-run Food and Nutrition Research Institute (FNRI) which showed an alarming spike in nicotine product use among youth aged 10 to 19. The same data showed that from 0.8% in 2015, nicotine product use in this age group climbed to 3.2% in 2019 and skyrocketed to 39.9% in 2023.

“In just four years, vaping among youth nicotine users increased more than tenfold, reflecting both an influx of new nicotine users and a shift from cigarette smoking to vape use. Lumabas ka nga lang sa bahay, sa mall, sa parking lot, o sa labas ng mga schools diyan, makikita mo ang paglaganap ng vaping, lalo na sa mga kabataan. [You just have to leave the house to see that in the malls, in parking lots, outside schools, there is a proliferation of vaping, especially among the youth.] Vaping has evolved into a lifestyle product, flavored, colorful, easily accessible, and aggressively targeted at younger consumers,” Quimbo said. 

“If vaping continues to surge and its health impacts start to emerge, can the government shoulder the cost of the necessary medical and rehabilitative interventions? If not, it is our duty to rethink the current excise tax rates. We cannot allow a generation to become heavily nicotine-dependent, only to realize later that we underpriced the health risks and underfunded the consequences,” Quimbo added.

Currently, vape products are under a two-tier tax system for salt nicotine and conventional freebase. The salt nicotine is taxed at P60 per ml, while freebase nicotine is taxed at P6.95 per ml. 

“Excise taxes on sin products are guided by two key principles: to discourage consumption and to generate revenue for health programs. The rising use of vape poses serious health risks, including respiratory and cardiovascular illnesses, which could further burden the country’s healthcare system,” Quimbo added.

During the same hearing, Japan Tobacco International (JTI) director for fiscal and regulatory affairs Mario Zinampan expressed support to Quimbo’s call for a unitary tax rate for vape under the Marikina lawmaker’s House Bill 1316.  

“We underscore our support for the unification and rationalization of vapor product taxation. Differentiated tax treatment across similar products creates opportunities for misclassification and regulatory arbitrage, enabling certain products to be declared under lower tax categories,” he said.

“This practice undermines revenue collection and effectively constitutes another form of illicit trade. Harmonizing the tax treatment of vapor products is therefore a necessary measure to prevent tax avoidance and to ensure a level playing field,” Zinampan added.

Having said that, the JTI official said that a unified tax for vapor products should be set at the same level as the tax imposed on heated tobacco products, arguing that both categories are recognized alternatives to cigarettes. 

“Legislative records leading to the enactment of Republic Act No. 11467—the Excise Tax Law of 2020—exhaustively discussed the policy rationale for differentiating the tax treatment of combustible cigarettes and non-combustible alternatives. Aligning vapor and heated tobacco tax rates is thus consistent with legislative intent, promotes coherence in the excise tax framework, and helps prevent tax avoidance through product misdeclaration,” Zinampan said. — BM, GMA Integrated News