Philippine E-cigarette Industry Resisting Taxes On par With Tobacco

Source from:  BusinessWorld Online 08/19/2019

THE e-cigarette lobby said its products are safer than traditional products and asked the government not to tax it at the same rate as tobacco-based products.

Industry groups said Friday that taxing e-cigarette and vapor products on par with regular cigarettes will not curb tobacco use and will discourage use of their “less harmful alternatives” if they were taxed at the same rate.

The Philippine e-cigarette Industry Association (PECIA) and the Vapers Philippines (Vapers PH), in separate statements, urged legislators to consider studies which found that e-cigarettes and vapor products are a “significantly less harmful alternative.”

“Heavy taxes on reduced-risk products will only result in smokers sticking it out with conventional cigarettes instead of switching to less harmful nicotine products,” Vapors PH said.

PECIA also pushed for a public consultation on proposed tax legislation which they said will be a venue to discuss other measures to reduce tobacco use.

“PECIA wants to draw attention to the fact that Congress made no public consultation for the proposed legislation. Our organization could have provided the resources and studies to aid House Representatives understand tobacco harm reduction strategies being embraced by some countries,” PECIA said in the statement.

House Bill (HB) 1026, approved on second reading on Aug. 14, further raises the excise tax on heated tobacco or e-cigarettes to P45 per pack in 2020 and an incremental increase of P5 per pack per year, on par with regular cigarettes, while vapor products with nicotine salts increases the tax to P30 from the current P10 per milliliter, with an incremental P5 yearly increase to P45 by 2023.

However, the Department of Health-Department of Finance (DoH-DoF) version of the bill proposes that vapor products to be taxed at the same rate at P45 per milliliter with an incremental increase of P5 per year to P60 by 2023 and by 10% annually thereafter.

Vapers PH said the UK and New Zealand have encouraged their citizens to adopt “less harmful nicotine products, particularly e-cigarettes” instead of regular smoking.

“Experts believe that the remarkable decline in Japan’s smoking rate was accelerated by the entry of heated tobacco products in the Japanese market in 2014,” Vapers PH said.

Finance Undersecretary Karl Kendrick T. Chua, however, said e-cigarettes and vapor products should be taxed at par with regular cigarettes as taking e-cigarettes is “not necessarily more beneficial.”　　Enditem