The Philippines is considering raising the tax rate on vapes to curb their use by teenagers. The usage rate of vapes among teenagers has soared to 40%. The Senate discussed the tax reform plan, emphasizing the need for strict law enforcement and cracking down on illegal trade. It is suggested to use the odd-even annual tax rate adjustment plan to optimize government revenue.
Key points:
- To curb the use of vapes by teenagers. The Philippine government is considering imposing higher tax rates on vape brands.
- Data shows that the utilization rate of vapes among teenagers has reached 40% in 2023, significantly higher than 7.5% in 2021.
- Senator Sherwin Gatchalian emphasized that strict law enforcement is needed to prevent the illegal trade of vapes.
Philippines proposes to raise tax rate on vapes and tighten regulation
According to a report by the Philippine Star on May 30th. The Philippine government is considering imposing a higher tax rate on vape products than on traditional cigarettes. Especially with the increasingly serious consumption of vapes among teenagers.
Assistant Commissioner of the Internal Revenue Service of the Philippines. Jethro Sabariaga, spoke at the Senate Ways and Means Committee hearing (Jethro Sabariaga), saying that tobacco and heated cigarette products should be subject to the same tax rate, but vape brands should, in addition to this, be subject to a higher tax rate.
Saba pointed out that the average usage of a box of cigarettes is 300 puffs, while the minimum usage of vapes is 600 puffs. If vapes are used for a long time, the government’s tax loss will be even more severe. He pointed out that higher taxes could increase the prices of vape brands, thereby curbing the purchasing desire of the younger generation.
Vaping among teenagers has reached 40% in 2023
Sherwin Gatchalian, the chairperson of the Philippine Senate Committee, mentioned that the utilization rate of vapes among teenagers has risen from 7.5% in 2021 to 40% in 2023. This rapid growth trend is worrying, especially when there is a lack of sufficient understanding of the ingredients of vapes.
To address the proliferation of vape brands, especially illegal products. The State Taxation Administration began implementing a tax printing system in 2024. If not printed, it means that such products have not paid consumption tax, will be seized, and will face tax evasion charges. Before the implementation of the printing system in 2023, only 11.2 million milliliters of vape brands were imported and taxed, but by 2024, this figure had soared to 130.5 million milliliters.
Meanwhile, the Philippine Senate is discussing amending the consumption tax on cigarette products to combat the increasingly serious illegal trade. One proposal of the House of Representatives is to reduce the consumption tax rate on cigarettes by 5% annually. However, Gatchalian said that reducing the tax rate cannot effectively combat illegal trade, and law enforcement is the key point.
At the meeting, Philip Morris International suggested that the government rationalize the current tax rate because inefficiency has led to a reduction in government revenue.
