Calls are growing for the government to adopt different tax rates for cigarettes and smoke-free nicotine products, as industry groups warn that steep taxes on vapes and heated tobacco could drive more consumers toward the illicit market.
At the 2nd National Summit on Nicotine and Harm Reduction, consumer advocates, medical experts and industry representatives urged policymakers to base excise taxes on the relative risks of combustible and smoke-free products.
The push comes as the government weighs proposals to raise taxes on vape products to levels comparable with cigarettes, alongside measures that would restrict or ban some smoke-free nicotine products.
Summit participants acknowledged the government’s need for revenue but argued that aggressive tax increases could make legal products less competitive against untaxed alternatives.
They cited a study by the EU-ASEAN Business Council and Euromonitor International estimating that four in five e-vapes sold in the Philippines are untaxed. The study also estimated that illicit tobacco and vapor products cost the government ₱141 billion in foregone excise revenues in 2024 and 2025.
“We cannot look at these products only as another source of tax revenue,” Philippine E-Cigarette Industry Association President Joey Dulay said. “For smokers, they can also represent an opportunity to move away from cigarettes.”
PHILTRA co-convenor Dr. Lorenzo Mata said harm-reduction policies could help adult smokers transition away from combustible tobacco, while bans could risk expanding illicit markets.
The summit called for tougher enforcement against illicit trade and youth access, alongside a tax structure that maintains distinctions between combustible cigarettes and smoke-free nicotine products.
The debate comes as policymakers balance competing goals: protecting public health, raising excise revenues and keeping legal nicotine products competitive with illicit alternatives.
