Support for e-cigarette tax gains ground

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    Higher levy. The DOF says both House and Senate have aligned their positions with stand to impose higher taxes on alternatives to cigarettes.
    Higher levy. The DOF says both House and Senate have aligned their positions with stand to impose higher taxes on alternatives to cigarettes.

    The Department of Finance (DOF) has expressed its gratitude to the chairpersons of both the Senate and Lower House’s ways and means committees for their parallel public statements supporting similar tax rates on electronic cigarettes, vapes, heated tobacco products (HTPs) and other electronic nicotine delivery systems and electronic non-nicotine delivery systems (ENDS/ENNDS).

    “We would like to thank (House ways and means chairman, Albay) Rep. (Joey) Salceda for publicly committing to tax ENDS/ENNDS at the same rate as the proposal of (Senate ways and means chairperson) Senator Pia Cayetano. From the start, we have been encouraged by the strong efforts of both chairpersons to push the reform,” Karl Kendrick Chua, DOF undersecretary, said in a statement sent to reporters over the weekend.

    “This time, we are more strongly encouraged because both Sen. Cayetano and Cong. Salceda are now aligned in their proposals,” he added.

    Chua was referring to Salceda’s remarks last week to the press that “given the logic of the initial reported ban – precautionary principle – we (the House tax panel) might go for a higher rate (from) P25 per milliliter (mL) to P45 per mL.”

    “Cong. Salceda’s recent pronouncements mean that, if Senate Bill (SB) No. 1074 is passed by the Senate in its present form, there will be no disagreement on tax rates for ENDS/ENNDS during the bicameral conference committee (bicam) talks to iron out possible differences between the Senate and House versions. This could only mean well for the ‘sin’ tax reform as a whole,” Chua added.

    The rates Salceda proposed recently are the same rates embodied in SB 1074, which proposes to tax ENDS/ENNDS at parity with cigarette products.

    SB 1074, or the act increasing the excise tax on alcohol products, HTPs and vapor products, aims to align the tax rate of HTPs and vape with traditional cigarettes at P45 beginning next year, P50 in 2021, P55 in 2022 and P60 in 2023, with five percent annual increases from 2024 onwards.

    Both House and Senate versions of the proposal also ban flavors other than mint, menthol and tobacco for ENDS/ENNDS, in an effort to discourage consumption among young people.