A growing debate is unfolding over the taxation of electronic vape juices in the Philippines, as lawmakers seek to address inconsistencies and bolster government revenue. The current system, characterized by differing rates for salt nicotine and freebase nicotine products, is facing scrutiny from both authorities and industry representatives.
The House of Representatives Committee on Ways and Means is currently reviewing multiple bills aimed at simplifying the vape juice tax structure. The core issue revolves around the practicality and fairness of applying two distinct rates to products with similar functions, a situation that officials believe is creating loopholes for tax evasion.
Bureau of Internal Revenue officials have voiced strong support for a uniform rate, emphasizing that it would significantly streamline tax administration and enforcement. The existing structure levies P60.20 per milliliter on salt nicotine, while freebase nicotine is taxed at P6.49 per milliliter, with both subject to annual increases.
A key proposal suggests a unified tax of P10 per milliliter for all vape juices. Proponents argue that the current system is “no longer workable,” allowing importers to exploit the lower rate by misclassifying products. The disparity, they contend, makes little sense when the products essentially serve the same purpose.
Government revenue data reveals a striking divergence. Collections from freebase vape juices have skyrocketed, jumping from P50.42 million in 2023 to P857.3 million in 2024, and reaching P1.85 billion in the first ten months of 2025. Conversely, revenue from salt nicotine products has plummeted.
Collections on salt nicotine fell sharply to P84.72 million from January to May 2024, down from P173.31 million in 2023 and P137.77 million in 2022. Data collection on salt nicotine has even been suspended since June 2024, prompting a review of existing records by the Bureau of Internal Revenue.
Industry stakeholders, like Japan Tobacco International, are also advocating for simplification. They argue that differentiated tax treatment creates opportunities for misclassification and illicit trade, undermining legitimate businesses. A level playing field, they believe, requires harmonized tax rates.
Some propose aligning vape juice taxes with those of heated tobacco products, currently at P37.63 per pack of 20 units. This suggestion aims to create a more consistent regulatory landscape and further discourage tax avoidance strategies.
While the debate centers on taxation, public health concerns remain paramount. Medical experts emphasize that both salt nicotine and freebase nicotine are harmful, despite differences in nicotine delivery. Both pose significant health risks and should be approached with caution.
Advocates for nicotine consumers suggest that unifying the tax rates could encourage smokers to switch to vaping as a potentially less harmful alternative. Maintaining momentum in this transition, they argue, requires clarity and simplicity in the regulatory framework, removing confusion and promoting informed choices.
