Most vape brands sold in Philippines remain unregistered — DTI

MANILA, Philippines — The Department of Trade and Industry (DTI) reported that 93% of vape brands in the market remain unregistered, as lawmakers and agencies push for unified excise tax rates and stronger action against illicit trade.

During the August 25 House Committee on Ways and Means hearing on tobacco and vapor excise taxes, DTI Assistant Secretary Marcus Valdez II disclosed that of 313 vape brands tracked in the market, 292 were not registered with the agency.

“From our survey, there are 313 vape brands in the market; about 292 are not registered. So, it’s at 93%,” Valdez said.

Valdez pointed out that while 18 vape brands were registered, two of them, Shift and Chillax, are set for cancellation. He emphasized that the Bureau of Customs (BOC) likewise identified these brands in its hearing report.

Asked why so many brands failed to register, Valdez said the DTI had granted time for compliance, but certain sellers ignored the requirement and kept operating. He noted that the agency pursued formal cases against them, resulting in penalties.

In the discussion on youth access to vapor products, Valdez emphasized the difference between compliant businesses and those operating illicitly or without proper registration.

“I don't think legitimate traders would be selling to minors. During our monitoring we would see retailers in the malls where they have explicit signs saying that minors are not allowed to enter. I know for a fact that in the big malls they are refusing to cater to minors. But for the establishments outside malls, here you find them [illicit sellers] in the strip malls or in the streets,” Valdez said.

“It's been our experience that when we monitor during daytime these establishments are closed, they open at night when most of the government workers are already at home,” he added.

Rep. Miro Quimbo, Chair of the Ways and Means Committee, noted that the uneven excise tax rates were a key factor behind the lack of registrations for nicotine salt products.

“They will not register because the tax is too high. It’s not because of the preferred chemical composition,” Quimbo said.

The DTI also supported the measure to harmonize excise tax rates for nicotine salt and freebase vapor products.

The Department of Finance (DOF), Bureau of Internal Revenue (BIR), and BOC likewise agreed on moving toward a single excise tax rate instead of the existing two-tier structure, while discussions continue on what the appropriate rate should be.

According to Rep. Roberto Nazal, the committee has established that the existing excise tax framework is driving tax leakage.

“Based on earlier manifestations by our committee members, we’ve established that the current two-tier system enabled or allowed a tax leakage. Some are in agreement that a single tier will plug that loophole,” Nazal said.

Rep. Rufus Rodriguez also challenged the rationale for maintaining distinct tax rates, pointing out that BIR data reflected zero collections from nicotine salt products. He suggested a single rate of P15 per milliliter, emphasizing the balance between revenue generation and discouraging illicit trade.

Rep. Bong Suntay called on fiscal authorities to study international practices, stressing that mature economies maintain separate tax levels for cigarettes and vapor products.

“Mr. Chair, I’m trying to rationalize why in a lot of European countries, the tax rates are different between traditional cigarettes and vape products. There should be a reason. They have more advanced studies. They are more mature when it comes to taxation [of these products]. But here, why do we want to equalize the two categories? They should have a reason. I believe that when the wheel is not broken, we should not reinvent it,” Suntay said.

Economist Bienvenido Oplas also cited international practices showing significant excise tax differentials between cigarettes and e-cigarettes—45% in Indonesia, 96% in the United Kingdom, and a full 100% in New Zealand.

The discussion came amid continued enforcement actions by revenue and customs agencies targeting illicit tobacco and vapor products.

The BIR disclosed that enforcement activities on tobacco and vape products reached 6,196 so far in 2026, generating an estimated P1.7 billion in excise taxes, a significant increase from 2,318 activities and P122 million in 2025.

The BOC reported 253 tobacco seizures worth P10 billion in 2026, compared with 317 seizures valued at P1.87 billion in 2025. For vapor products, Customs recorded 18 seizures worth P1.6 billion in 2026, against 37 seizures valued at P649 million the year before.

BIR Head Revenue Executive Assistant Atty. Dondanon Galera reported that enforcement activities have revealed an increasing presence of illicit products in the market.

“Base dun sa experience namin, padami nang padami ang huli namin ng illicit products,” Galera said.

According to Rep. Nazal, the committee needs to consider the broader implications of the chosen tax rate, particularly its influence on government revenues and the illicit market.

“As mentioned by the Chairman, we do not want to overtax to the point that we will promote further smuggling and discourage investors from investing in our country,” Nazal said.

“That beyond a certain rate, we may not be raising more revenue at all but simply pushing consumers in volume to the illicit market,” he added.