EIGHTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S e n a te
of tlje <Btrcrrt«rp
S.B. No.
SENATE
987
'19 
AUG 28 P5 25
RFCFiW. LlEY:
INTRODUCED BY: SENATOR EMMANUEL D. PACQUIAO
AN ACT
INCREASING THE EXCISE TAX ON HEATED TOBACCO PRODUCTS AND 
VAPOR PRODUCTS, AMENDING FOR THIS PURPOSE SECTIONS 144 (B), 
144 (C), 147 AND 150 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, 
AS AMENDED, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Tlie e-cigarette and vapor products industry have significantly attracted more 
users globally and locally as a popular alternative to tobacco-based products. Further, 
based on current trends, it is most likely that HTPs or heated tobacco products will be 
introduced in more countries, as well.
Heated Tobacco Products are not e-cigarettes. HTPs heat tobacco in order to 
generate nicotine while e-cigarettes heat e-liquid.
The Philippine government, in an attempt to reduce consumption of cigarettes 
while attaining incremental revenue targets for R.A. 11223 or the UHC law, seeks to 
insure implementation of R.A. 11346 to fill the funding gaps.
However, there is a need to substantially adjust the current tax rates of these 
products to significantly add funding for the Universal Health Care program. The 
additional funding that will be generated through this bill will assure coverage of 
quality health care for every Filipino families.
In view of the foregoing, approval of this bill is earnestly sought.
EMMA
TitfTACQUIAO


EIGHTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S.B. No.
SENATE
987
aeiw u -
ot tbf fertrftflrp
*19 liUG 28 P5 25
INTRODUCED BY: SENATOR EMMANUEL D. p /® ( jI DAO'
AN ACT
INCREASING THE EXCISE TAX ON HEATED TOBACCO PRODUCTS AND 
VAPOR PRODUCTS, AMENDING FOR THIS PURPOSE SECTIONS 144 (B),
144 (C), 147 AND 150 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, 
AS AMENDED, AND FOR OTHER PURI,OSES
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled:
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Section 1. 
Section 144 (B) and 144 (C) of the National Internal Revenue Code of 1997, as
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amended, are hereby further amended to read as follows:
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Sec. 144 (B) Heated Tobacco Products. -  There shall be levied, assessed and collected
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on heated tobacco products an excise tax at the rate prescribed below:
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“(1) [Ten pesos (PI 0.00)] FORTY-FIVE PESOS (P45.00) per pack of twenty (20) units
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or packaging combinations of not more than twenty (20) units effective on January 1, 2020;
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“FIFTY PESOS (P50.00) per pack of twenty (20) units or packaging combinations of
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not more than twenty (20) units effective on January 1, 202[0] 1;
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“FIFTY-FIVE PESOS (P55.00) per pack of twenty (20) units or packaging
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combinations of not more than twenty (20) units effective on January 1, 202[0]2;
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“SIXTY PESOS (P60.00) per pack of twenty (20) units or packaging combinations of
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not more than twenty (20) units effective on January 1, 202[0]3;
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“2) PROVIDED THAT t[T]he rates of tax imposed under this Subsection shall be
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increased by five percent (5%) every year effective on January 1, 202[1]4, through revenue
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regulations issued by the Secretary of Finance.
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“Heated tobacco products shall only be packed in twenties and other packaging
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combinations of not more than twenty (20) units.
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“No heated tobacco products manufactured in the Philippines and produced for export
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shall be removed from their place of manufacture or exported without posting of an export
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bond equivalent to the amount of the excise tax due thereon if sold domestically: Provided,
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however. That heated tobacco products for export may be transferred from the place of
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manufacture to a bonded facility, upon posting of a transfer bond, prior to export.
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“Heated tobacco products imported into the Philippines and destined for foreign
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countries shall not be allowed entry without posting a bond equivalent to the amount of customs
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duty, excise and value-added taxes due thereon if sold domestically.
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“Manufacturers, distributors, and importers of heated tobacco products shall, within
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thirty (30) days from the effectivity of this Act, and within the first five (5) days of every month


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thereafter, submit to the Commissioner a sworn statement of the volume of sales AND
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REMOVALS for each particular brand of heated tobacco products sold for the three-month
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period immediately preceding.
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“Any manufacturer, distributor, or importer who, in violation of this Section,
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misdeclares, or misrepresents in his or its sworn statement herein required any pertinent data
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or information shall, upon the final findings by the Commissioner that the violation was
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committed, be penalized by a summary cancellation or withdrawal of his/her or its permit to
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engage in business as manufacturer, distributor, or importer of heated tobacco products.
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“Any corporation, association or partnership liable for any of the acts or omissions in
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violation of this Section shall be fined treble the amount of deficiency taxes, surcharges and
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interest which may be assessed pursuant to this Section.
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“SELLING OF HEATED TOBACCO PRODUCTS AT A PRICE LOWER THAN THE
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COMBINED EXCISE AND VALUE-ADDED TAXES IMPOSED UNDER THE LAW
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SHALL BE PROHIBITED. THE SELLER OF SUCH PRODUCTS SHALL BE PUNISHED
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WITH A FINE OF NOT LESS THAN TEN (10) TIMES THE AMOUNT OF EXCISE PLUS
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VALUE-ADDED TAXES DUE BUT NOT LESS THAN TWO HUNDRED THOUSAND
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PESOS (P200,000.00) NOR MORE THAN FIVE HUNDRED THOUSAND PESOS
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(500,000.00), AND IMPRISONMENT OF NOT LESS THAN FOUR (4) YEARS BUT NOT
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MORE THAN SIX (6) YEARS.
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“THE BUREAU OF INTERNAL REVENUE IS MANDATED TO ISSUE A
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REVENUE REGULATION PRESCRIBING THE FLOOR PRICE OR THE MINIMUM
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PRICE OF HEATED TOBACCO PRODUCT TAKING INTO ACCOUNT THE SUM OF
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THE EXCISE AND VALUE-ADDED TAXES AS PROVIDED HEREIN.
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“Any person liable for any of the acts or omissions proliibited under this Section shall
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be criminally liable and penalized under Section 254 of this Code. Any person who willfully
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aids or abets in the commission of any such act or omission shall be criminally liable in the
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same manner as the principal.”
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“If the offender is not a citizen of the Philippines, he/she shall be deported immediately
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after serving the sentence, without further proceedings for deportation.”
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“The sale and distribution, or transfer of heated tobacco products by any person to
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minors; purchasing, or otherwise reeeiving heated tobacco products from a minor; and the sale,
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purchase, and use of heated tobacco products by minors, shall be prohibited. ‘Minor’ refers to
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any person below eighteen (18) years old. Any violation of this provision shall be punishable
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with the same penalties provided for in Republic Act No. 9211, otherwise known as the
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“Tobacco Regulation Act of 2003 ’.”
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“It shall not be a defense for the person selling or distributing that he/she did not know
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nor had any reason to believe that the product was for the consumption of the minor to whom
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it was sold.”
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“Unit packets and any outside wrapping of heated tobacco products and other similar
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products shall carry a health warning compliant with the Republic Act No. 10643, otherwise
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known as “The Graphic Health Warnings Law’.”
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“Manufacturers and importers are given a p>eriod of one (1) year from the effectivity of
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this Act to comply therewith.”
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“Eighteen (18) months after the effectivity of this Act, no person or legal entity shall
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sell or commercially distribute or display any heated tobacco product without ensuring that the
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labels and packages, as well as any other container used in displaying the said products meet
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the requirements under this Act.”


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“Any violation of the foregoing provisions on health warnings shall be punishable with 
the same penalties as provided for in Republic Act No. 10643, otherwise known as “The 
Graphic Health Warnings Law.”
Section 144 (C) Vapor Products. -  There shall be levied, assessed and collected on 
vapor products excise tax at the rates prescribed below:
EFFECTIVE ON JANUARY 1, 2020, FORTY-FIVE (P45.00) PER MILLILITER OR 
A FRACTION THEREOF;
EFFECTIVE ON JANUARY 1,2021, FIFTY PESOS (P50.00) PER MILLILITER OR 
A FRACTION THEREOF;
EFFECTIVE ON JANUARY 1, 2022, FIFTY-FIVE PESOS (P55.00) PER 
MILLILITER OR A FRACTION THEREOF;
EFFECTIVE ON JANUARY 1,2023, SIXTY PESOS (P60.00) PER MILLILITER OR 
A FRACTION THEREOF;
PROVIDED THAT THE RATES OF TAX IMPOSED UNDER THIS SUBSECTION 
SHALL BE INCREASED BY FIVE PERCENT (5%) EVERY YEAR EFFECTIVE 
JANUARY 1, 2024, THROUGH REVENUE REGULATIONS TO BE ISSUED BY THE 
SECRETARY OF FINANCE.
“THE MANUFACTURE, IMPORTATION, SALE AND DISTRIBUTION OF 
VAPOR PRODUCTS WITH FLAVORING OTHER THAN PLAIN TOBACCO OR PLAIN 
MENTHOL, SHALL BE PROHIBITED.
“Manufacturers, distributors, and importers of vapor produets shall be required to 
indicate on the package the actual volume in milliliters of the liquid solutions and gels.
“No vapor products manufactured in the Philippines and produced for the export shall 
be removed from their place of manufacture or exported without posting of an export bond 
equivalent to the amount of customs duty, excise and value-added taxes due thereon if sold 
domestically. Provided, however. That vapor products for export may be transferred from the 
place of manufacture to a bonded facility, upon posting of a transfer bond prior to export.
“Vapor products imported into the Philippines and destined for foreign countries shall 
not be allowed entry without posting a bond equivalent to the amount of customs duty, excise 
and value-added taxes due thereon if sold domestically.
“Manufacturers, distributors, and importers of vapor products shall, within thirty (30) 
days from the efFectivity of this Act, and within the first five (5) days of every month thereafter, 
submit to the Commissioner a sworn statement of the volume of sales for each particular brand 
of vapor products sold for the three-month period immediately preceding.
“Any manufacturer, distributor, or importer who, in violation of this Section, 
misdeclares or misrepresents in his/her or its sworn statement herein required pertinent data or 
infonnation shall, upon final findings by the Commissioner that the violation was committed, 
be penalized by a summary cancellation or withdrawal of his/her or its permit to engage in 
business as manufacturer, distributor, or importer of vapor products.
“Any corporation, association or partnership liable for any for any of the acts or 
omissions in violation of this Section shall be fined treble the amount of deficiency taxes, 
surcharges and interest which may be assessed pursuant to this Section.
“SELLING OF VAPOR PRODUCTS AT A PRICE LOWER THAN THE 
COMBINED EXCISE AND VALUE-ADDED TAXES IMPOSED UNDER THE LAW 
SHALL BE PROHIBITED. THE SELLER OF SUCH PRODUCTS SHALL BE PUNISHED


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WITH A FINE OF NOT LESS THAN TEN (10) TIMES THE AMOUNT OF EXCISE PLUS 
VALUE-ADDED TAXES DUE BUT NOT LESS THAN TWO HUNDRED THOUSAND 
PESOS (P200,000.00) NOR MORE THAN FIVE HUNDRED THOUSAND PESOS 
(500,000.00), AND IMPRISONMENT OF NOT LESS THAN FOUR (4) YEARS BUT NOT 
MORE THAN SIX (6) YEARS.
“THE BUREAU OF INTERNAL REVENUE IS MANDATED TO ISSUE A 
REVENUE REGULATION PRESCRIBING THE FLOOR PRICE OR THE MINIMUM 
PRICE OF VAPOR PRODUCTS TAKING INTO ACCOUNT THE SUM OF THE EXCISE 
AND VALUE-ADDED TAXES AS PROVIDED HEREIN.
“Any person liable for any of the acts or omissions prohibited under this Section shall 
be criminally liable and penalized imder Section 254 of this Code. Any person who willfully 
aids or abets in the commission of any such act or omission shall be criminally liable in the 
same manner as the principal.
“If the offender is not a citizen of the Philippines, he/she shall be deported immediately 
after serving the sentence, without further proceedings for deportation.
“The sale and distribution, or transfer of vapor products by any person to minors; 
purchasing, or otherwise receiving vapor products from a minor; and the sale, purchase, and 
use of vapor products by minors, shall be prohibited. ‘Minor’ refers to any person below 
eighteen (18) years old. Any violation of this provision shall be punishable with the same 
penalties provided for in Republic Act No. 9211, otherwise known as the “Tobacco Regulation 
Act of 2003’.
“It shall not be a defense for the person selling or distributing that he/she did not know 
or was not aware of the real age of the minor. Neither shall it be a defense that he/she did not 
know nor had any reason to believe that the product was for the consumption of the minor to 
whom it was sold.
“Unit packets and any outside wrapping of vapor products and other similar products 
shall carry a health warning compliant with Republic Act No. 10643, otherwise known as “The 
Graphic Health Warnings Law.”
“Manufacturers and importers are given a period of one (1) year from the effectivity of 
this Act to comply therewith.
“Eighteen (18) months after the effectivity of this Act, no person or legal entity shall 
sell or commercially distribute or display any vapor product without ensuring that the labels 
and packages, as well as any other container used in displaying the said products meet the 
requirements under this Act.
“Any violation of the foregoing provisions on health warning shall be punishable with 
the same penalties provided for in Republic Act No. 10643, otherwise known as “The Graphic 
Health Warnings Law’.
“Notwithstanding the provisions of this Act on heated tobacco products and vapor 
products, this Act acknowledges the need for further scientific evidence on the health impact 
of these products.
Section 2. Section 147 of the National Internal Revenue code of 1997, as amended, is hereby 
further amended to read as follows:
“SEC. 147. Definition of Terms.
XXX.
XXX
(f) ‘Vapor products’ shall mean any liquid solution or gel which contains nicotine that 
transforms into an aerosol without combustion through the employment of a mechanical 
heating element, battery or circuit that can be used to heat such solution or gel, and includes 
but is not limited to, a cartridge, a tank, and the device without a cartridge or tank. It is


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commonly known as ‘e-liquids’ for ‘e-cigarettes.’ IT INCLUDES NICOTINE SALT/SALT 
NICOTINE, AND CONVENTIONAL “FREEBASE” OR “CLASSIC” NICOI'INE, AND 
OTHER SIMILAR PRODUCTS. It also includes electronic nicotine and non-nicotine delivery 
systems (ENDS/ENNDS) which are combinations of non-tobacco containing e-liquids or 
refills which contain up to sixty- five milligrams per milliliter (65mg/ml) of nicotine in the e- 
liquid or refill and an electronic delivery device to produce an aerosol, mist or vapor that users 
inhale by mimicking the act of smoking.”
Section 3. 
Section 150 of the NIRC, as amended, is hereby amended to read as follows:
SEC. 150. Non-essential Goods. -  There shall be levied, assessed and collected a tax 
equivalent to twenty-percent (20%) based on the wholesale price or the value of importation 
used by the Bureau of Customs in determining tariff and customs duties, net of excise tax and 
value-added tax, of the following goods:
XXX
(c) Yachts and other vessels intended for pleasure or sports; AND [.]
(D) TOBACCO HEATING SYSTEMS AND ELECTRONIC OR MECHANICAL 
CIGARETTE DEVICES, WHICH INCLUDE BUT ARE NOT LIMITED TO 
ELECTRONIC AND/OR NON-ELECTRONIC NICOTINE DELIVERY SYSTEMS, E- 
CIGARETTES, VAPES, VAPORIZERS, VAPING SYSTEMS, TANK SYSTEM, MODS, 
AND E-HOOKAHS, OR ANY SIMILAR PRODUCT, AS MAY BE DETERMINED BY 
REVENUE REGULATION, AND ANY MANDATORY COMPONENT THEREOF 
EXCLUDING BATTERIES, CHARGERS, AND CHARGING CABLES WHEN SOLD 
SEPARATELY. HOWEVER, IF BATTERIES, CHARGERS, CHARGING CORDS, AND 
OTHER ACCESSORIES ARE SOLD OR PACKAGED TOGETHER WITH A TOBACCO 
HEATING OR ELECTRONIC OR MECHANICAL CIGARETTE DEVICE AS ONE 
SALEABLE ITEM, THE VALUE THEREOF SHALL FORM PART OF THE 
WHOLESALE PRICE OR THE VALUE OF IMPORTATION.
Section 4. 
Implementing Rules and Regulations. -  The Secretary of Finance shall, upon
the recommendation of the Commissioner of THE BUREAU OF Internal Revenue, 
promulgate the necessary rules and regulations for the effective implementation of this Act.
Section 5. 
Repealing Clause -  All laws, decrees, executive orders, rules and regulations or
parts thereof which are contrary to or inconsistent with this Act are hereby repealed, amended 
or modified accordingly.
Section 6. 
Effectivity. -  This Act shall take effect upon its publication either in the Official 
Gazette or in a newspaper of general circulation.
Approved,