Republic of the Philippines
House of Representatives
Quezon City
Nineteenth Congress
First Regular Session
HOusE.Bin-L`NO.5532
Introduced by Representative JOEY SARTE SALCEDA
AN ACT
AMENDING SECTION 144 0F REPUBLIC ACT NO. 8424, OTHERWISH KNOWN AS
"THE NATloNAL INTERNAL REVENUE CODE oF igg7", As AMENDnD
ERELANATORY NOTE
The harms of vaping and the need to compensate the people for its adverse impacts on
health  are  already  well  established  in  both  scientific  literature  and  global jurisprudence.  On
September 2022, the global vape brand Juul agreed to settle with several states in the US over its
marketing practices specifically targeted at the youth. The settlement totaled to USD 438.5 million,
making it one of the largest financial settlements for harmful marketing practices ever made in the
world.
In February 2020, the Centers for Disease Control and Prevention (CDC) confirmed 2,807
cases of e-cigarette or vaping use-associated lung injury (EVALI) and 68 deaths attributed to that
condition. The outbreak put into serious question the clalins of vaping companies that vaping is
liarm reduction against conventional tobacco products. That it markets specifically to young people
who have never even smoked in their lives puts even more doubt on this claim.
Research from The Johns Hopkins University on vape ingredients published in October
2021 showed that there are thousands of chemical ingredients in vape products, most of which are
not  yet  identified.  Among  those  the  team  could  identify  were  several  potentially  harmful
substances, including caffeine, three chemicals never previously found in e-cigarettes, a pesticide
and two  flavorings  linked  with  possible  toxic  effects  and respiratory  irritation.  This  range  of
harmful chemicals could be even more hamiful than conventional tobacco itself.
This representation asserts that the State should not be in the business of choosing between
harmful substances, promoting one over the other through lower taxation. Anything that causes
harm, especially something as potentially harmful as vaping should not be promoted.


While  prohibition  of  dangerous  substances  has  proven  to  generally  fall  as  a  policy,
especially as regards promoting public health, regulation, along with taxation appears to result in
better  outcomes.  In  fact,  Philippine  excise  tax  laws  have  been  lauded  by  the  World  Health
Organization as a best practice in promoting public health.
This representation seeks to internalize the social and health costs of vaping through higher
taxes. This measure will increase rates by an average of 14% for products with already existing
excise taxes, while imposing  a 20°/o ad valorem plus P20  specific tax on vaping devices.  The
measure is expected to raise revenues by P2.34 billion annually.


Republic of the Philippines
House of Representatives
Quezon City
Nineteenth Congress
First Regular Session
HOusE i3iL-rio.   553 2
Introduced by Representative JOEY SARTH SALCEDA
AN ACT
AMHNDING SECTION 144 0F REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS
``THE NATIONAL INTERNAL REVHNUE CODE 0F 1997", AS AMENDED
Be it enacted by the Senate and House Of Representatives Of the Philippines in Congress
assembled:
SECTION 1. Section 144 of the National Internal Revenue Code, as amended, is hereby
further amended to read as follows:
SE:C. 144. Tobacco Products, Heated Tobacco Products, [and] Vapor Products AND
ELECTRONIC  NICOTINE  OR  NON-NICOTINE  DELIVERY  DEVICES - Thiere
shall be collected an excise tax [of One peso and seventy-five centavos (P1.75) effective
on January 1, 2013 on each kilogram of| ON the following products of tobacco:
XXX                          J*X)f                              J*XX
(8) Heated Tobacco Products. - There shall be levied, assessed and collected on heated
tobacco products an excise tax at the rate prescribed below:
Effective on January 1, 2020, Twenty-five pesos (P25.00) per pack of twenty (20) units
or packaging combinations of not more than twenty (20) units;
Effective on January 1, 2021, Twenty-seven pesos and fifty centavos (P27.50) per pack
of twenty (20) units or packaging combinations of not more than twenty (20) units;
Effective on January  1, 2022, Thirty pesos (P30.00) per pack of twenty (20) units  or
packaging combinations of not more than twenty (20) units; and


Effective on January  1,2023,  [Thirty-two pesos  and fifty centavos ¢32.50)I  FORTY
Pnsos per pack of twenty (20) units or packaging combinations of not more than twenty
(20) units.
The rates of tax imposed under this Subsection, shall be increased by five percent (5°/o)
every  year  effective  on  January  1,  2024  through  revenue  regulations  issued  by  the
Secretary of Finance.
Heated  tobacco  products  shall   only  be  packed  in  twenties  and   other  packaging
combinations of not more than twenty (20) units.
No heated tobacco products manufactured in the Philippines  and produced for export
shall be removed from their place of manufacture or exported without posting of an export
bond  equivalent  to  the  amount  of the  excise  tax  due  thereon  if  sold  domestically:
Provided, however, That heated tobacco products for export may be transferred from the
place of manufacture to a bonded facility, upon posting of a transfer bond, prior to export.
Heated tobacco 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 heated tobacco 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 and
removals for each particular brand of heated tobacco 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  or  its  sworn  statement  herein  required  any  pertinent  data  or
information  shall,  upon  final  findings  by  the  Commissioner  that  the  violation  was
committed, be penalized by a summary cancellation or withdrawal of histher or its permit
to engage in business as manufacturer, distributor, or importer of heated tobacco products.
Any  corporation,  association or partnership  liable 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.
Any person liable for any of the acts or omissions prohibited under this Section shall be
criminally liable and penalized under 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  Food  and Drug  Administration  (FDA)  shall  periodically  determine  and regulate,
consistent with evolving medical  and scientific  studies, the manufacture, importation,
sale,  packaging,  advertising,  and  distribution  of heated  tobacco  products,  including
banning the sale to nonsmokers or persons below twenty-one (21) years old.
Selling  heated  tobacco products to  persons below twenty-one  (21)  years old  shall  he
prohibited, and shall be punished with a fine of Ten thousand pesos ¢10,000.00) and
imprisonment of thirty (30) days.
Unit packets  and any  outside wrapping of heated tobacco products  and  other  similar
products shall cany a health waming compliant with Republic Act No.10643, otherwise
known as `The Graphic Health Warnings Law' .
Manufacturers, distributors, importers, and sellers of heated tobacco products are given a
period  of eighteen  (18)  months  from  the  effectivity  of the  implementing  rules  and
regulations (IRR) of this Act to comply with the requirements under such IRR.
Eighteen (18) months after the effectivity of this Act, no person or legal entity shall sell
or commercially distribute or display any heated tobacco product without ensuring that
thelabelsandpackages,aswellasanyothercontainerusedindisplayingthesaidproducts
meet the requirements under this Act.
Any violation of the foregoing provisions on health warnings shall be punishable with the
same penalties provided for in Republic Act No. 10643, otherwise known as `The Graphic
Health Warnings Law' .
The Bureau of Internal Revenue is mandated to issue a revenue regulation prescribing the
floor price or the minimum price of heated tobacco product taking into account the sum
of the excise and value-added taxes as provided herein.
(C) Vapor Products. [36] -There shall be levied, assessed and collected on vapor products
an excise tax at the rates prescribed below:
(1) Nicotine Salt or Salt Nicotine. -There shall be levied, assessed and collected on any
liquid substance, regardless of nicotine content, including nicotine-free  liquids or any
similar product, further classified as nicotine salt or salt nicotine, an excise tax based on
the following schedules:
Effective on January  1,  2020,  Thirty-seven pesos  (P37.00) per milliliter or a fraction
thereof;
Effective on January 1, 2021, Forty-two pesos (P42 .00) per milliliter or a fraction thereof;
Effective  on January  1,  2022, Forty-seven pesos  (P47.00)  per-milliliter or a fraction
thereof; and


Effective on January  1, 2023,  [Fifty-two pesos (P52.00)]  SIXTY PHSOS (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 on January I, 2024, through revenue regulations issued
by the Secretary of Finance.
(2) Conventional 'Freebase' or 'Classic' Nicotine.  - There  shall be levied, assessed and
collected on any liquid substance, regardless of nicotine content, including nicotine-free
liquid  or  any  similar product,  further  classified  as  conventional  'freebase'  or  'classic'
nicotine an excise tax based on the following schedules:
Effective  on  January  1,  2020,  Forty-five  pesos  (P45.00)  per ten  (10)  milliliters  or  a
fraction thereof;
Effective on January  1, 2021, Fifty pesos (P50.00) per ten (10) milliliters or a fraction
thereof;
Effective  on.  January  1,  2022,  Fifty-five  pesos  (P55.00)  per  ten  (10)  milliliters  or  a
fraction thereof; and
Effective on January  1, 2023, Sixty pesos (P60.00) per ten (10) milliliters 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.
Manufacturers, distributors, and importers of vapor products shall be required to indicate
on the package the actual volume in mimliters of the liquid solutions and gels.
No vapor products manufactured in the Philippines and produced for export  shall  be
removed from their place of manufacture or exported without posting of an export bond
equivalent to the anount of the excise tax 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
beallowedentrywithoutpostingabondequivalenttotheamountofcustomsduty,excise
and value-added taxes due thereon if sold domestically.
Manufacturers, distributors, and importers of vapor products shall , within thirty (30) days
fromtheeffectivityofthisAct,andwithinthefirstfive(5)daysofeverymonththereafter,
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 histher or its sworn statement herein required any pertinent data or
information  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  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.
Any person liable for any of the acts or omissions prohibited under this Section shall be
criminally liable and penalized under 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 FDA shall periodically determine and regulate, consistent with evolving medical and
scientific   studies,   the   manufacture,   importation,   sale,   packaging,   advertising,   and
distributionofvaporproducts,includingbanningthesaletononsmokersorpersonsbelow
twenty-one (21 ) years old, and banning of flavorings.
Provided,  That  vapor  products  which  exceed  sixty-five  milligrams  of  nicotine  per
milliliter (65mg/ml) of liquid or gel, or which does not exceed this limit but seeks to make
health claims, shall be subject to additional requirements as the DOH and the FDA may
impose:Provided,however,ThatthisshallnotdiminishtheregulatorypowersoftheFDA
over vapor products, regardless of nicotine content.
Selling vapor products to persons below twenty-one (21) years old shall be prohibited,
and shall be punished with a fine of Ten thousand pesos (Plo,000.00) and imprisonment
of (30) days.
The  manufacture,  importation,  sale  and distribution  of vapor products  with flavoring
other than plain tobacco or plain menthol, shall be prohibited.
Unit packets and any outside wrapping of vapor products and other similar products shall
carry a health waming compliant with Republic Act No. 10643, otherwise known as `The
Graphic Health Warnings Law' .
Manufacturers, distributors, importers, and sellers of vapor products are given a period
of eighteen (18) months from the effectivity of the IRR of this Act to comply with the
requirements under such IRR.
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 waning shall be punishable with the
samepenaltiesprovidedforinRepublicActNo.10643,otherwiseknownas`TheGraphic
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.
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 sun of the
excise tax and value-added tax as provided herein.
(D) ELECTRONIC NICOTINE AND NON-NICOTINE DELIVERY DEVICES. -
THERE   SHALL   BE   COLLECED   AN   EXCISE   TAX   0N   ELECTRONIC
NICOTINE AND NON-NICOTINE DELIVERY DEVICES AN EXCISE TAX IN
ACCORDANCE WITH THE FOLLOWING SCHEDULE.
(1) EFFECTIVE JANUARY 1, 2023:
(A)AN AD VALOREM TAX EQUIVALENT T0 TWENTY PERCENT (20%) OF
THE NET RETAIL PRICE;
(B)IN  ADDITION  T0   THE   AD  VALOREM  TAX  HEREIN  IMPOSHD,  A
SPECIFIC TAX OF TWENTY PESOS (P20.00) PER DEVICE
(2)  IN  ADDITION  TO  THE  AD  VALOREM  TAX  HEREIN  IMPOSED,  THE
SPECIFIC  TAX  RATE  IMPOSED  UNDER  THIS  SUBSECTION  SHALL  BE
INCREASED  BY  FIVE  PERCHNT  (5°/o)  EFFECTIVE  ON  JANUARY  1,  2024
THROUGH  REVENUE  REGULATIONS  ISSUED  BY  THE  SECRETARY  0F
FINANCH.
`ELECTRONIC NICOTINE AND NON-NICOTINE DELIVERY DEVICE' S;HAILL
MEAN ANY ELECTRONIC DEVICE THAT, THROUGH AN AEROSOLIZED
SOLUTION, DELIVERS NICOTINE, FLAVOR, OR ANY OTHER SUBSTANCE
TO  THE  USER  INHALING  FROM  THE  DEVICE;  AND  WHICH  SHALL
INCLUDE AN E-CIGARETTE; AN E-HOOKAH; AN E-CIGAR; A VAPE PEN;
AN ADVANCED REFILLABLE PERSONAL VAPORIZER; AN ELECTRONIC
PIPE;  AND  ANY  COMPONENT,  PART,  OR  ACCESSORY  0F  A  DEVICE
WITHOUT   REGARD   TO   WHETHER   THE   COMPONENT,   PART,   OR
ACCESSORY IS SOLD SEPARATELY FROM THE DHVICE.
`jvEr-REr4iL pRICE' SHALL MEAN THE PRICE AT wHlcH THE DEvlcE IS
SOLD  ON  RETAIL  IN  AT  LEAST  FIVE  (5)  MAJOR  SUPERMARKETS  IN
METRO MANILA, OR IN AT LEAST TWO (2) MAJOR ONLINE SHOPPING
NETWORKS,  EXCLUDING  THH  AMOUNT  INTENDED  TO  COVER  THE
APPLICABLE EXCISE TAX AND THE VALUE-ADDED TAX.


MAJOR SUPERMARKETS, AS CONTEMPLATED UNDER THIS ACT, SHALL
BH  THOSE  WITH  THE  HIGHEST  ANNUAL  GROSS  SALES  IN  METRO
MANILA oR THE REGloN, As THE CASE MAT Bn, As DETERMINHD By
THE   BIR,   AND   SHALL   EXCLUDE   RETAIL   OUTLETS   0R   KIOSKS,
CONVENIENCE  0R  SARI-SARI  STORES,  AND  OTHERS  0F  A  SIMILAR
NATURE: PROVIDED, THAT NO TWO (2) SUPERMARKETS IN THE LIST TO
BE SURVEYED ARE AFFILIATED AND/OR BRANCHES 0F HACH OTHER:
PROVIDED,  FINALLY,  THAT  IN  CASE  A  PARTICULAR DEVICE  IS  NOT
SOLD   IN   MAJOR   SUPERMARKETS,   THE   PRICE   SURVEY   CAN   BE
CONDUCTHD  IN  RETAIL  OUTLETS  WHHRE  SAID  DEVICH  IS  SOLD  IN
METRO MANILA, AS THE CASE MAY BE, UPON DETERMINATION 0F THE
COMMISSIONER 0F INTERNAL REVENUE.
MAJOR  ONLINE  SHOPPING  NETWORK,  AS  CONTEMPLATED  UNDER
THIS SECTION, SHALL BE THOSE WITH THE HIGHEST ANNUAL GROSS
SALES NATIONWIDE, AS DETERMINED BY THE BIR.
THE NET RETAIL PRICE SHALL BE VALIDATED BY THE BIR THROUGH
A BIANNUAL PRICH SURVEY UNDER OATH.
THE MHTHODOLOGY AND ALL PERTINENT DOCUMHNTS USED IN THE
CONDUCT 0F THE LATEST PRICE SURVEY SHALL BE  SUBMITTED TO
THE       CONGRESSIONAL       OVERSIGHT       COMMITTEE       0N       THE
COMPREHENSIVE     TAX     REFORM     PROGRAM     CREATHD     UNDER
REPUBLIC ACT NO. 8240.
NO   ELECTRONIC  NICOTINE  0R  NON-NICOTINE   DELIVERY  DEVICE
MANUFACTURED  IN  THH  PHILIPPINES AND  PRODUCED  FOR EXPORT
SHALL  BE  REMOVED  FROM  THEIR  PLACE  0F  MANUFACTURE   0R
EXPORTED WITHOUT POSTING OF AN EXPORT BOND EQUIVALENT T0
THE    AMOUNT    OF    THE    EXCISE    TAX    DUH    THEREON    IF    SOLD
DOMESTICALLY.
ELECTRONIC    NICOTINE    OR    NON-NICOTINE    DELLIVERY    DEVICES
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  AND  IMPORTERS  0F  ELECTRONIC  NICOTINE  OR
NON-NICOTINE DELIVERY DEVICES SHALL, WITHIN THIRTY (30) DAYS
FROM THE EFFECTIVITY 0F THIS ACT, AND WITHIN THE FIRST FIVE (5)
DAYS     OF     EVERY     MONTH     THEREAFTER,     SUBMIT     TO     THE
COMMISSIONER A SWORN STATEMENT OF THE VOLUME OF SALHS FOR
EACH   PARTICULAR   BRAND   OF   ELECTRONIC   NICOTINE   0R   NON-


NICOTINE DELIVERY DEVICE  SOLD FOR THE THREE-MONTH PERIOD
IMMnDIATELy PRECEDING.
ANY  MANUFACTURER  0R  IMPORTER  WHO,  IN  VIOLATION  0F  THIS
SECTION,   MISDECLARES   OR   MISREPRESENTS   IN   HISAIER   0R   ITS
SWORN  STATHMENT  HHREIN  REQUIRED  ANY  PHRTINENT  DATA  OR
INFORMATION SHALL, UPON FINAL FINDINGS BY THE COMMISSIONER
THAT   THE   VIOLATION   WAS   COMMITTHD,   81]   PENALIZED   BY   A
SUMMARY  CANCELLATION  OR  WITHDRAWAL  0F  HISAIER  0R  ITS
PERMIT TO ENGAGE IN BUSINESS AS MANUFACTURHR OR IMPORTHR
OF ELECTRONIC NICOTINE 0R NON-NICOTINE DELIVERY DEVICES.
ANY CORPORATION, ASSOCIATION OR PARTNERSHIP LIABLE FOR ANY
OF THE ACTS OR OMISSIONS IN VIOLATION 0F THIS SECTION SHALL
BE FINED TREBLE THE AMOUNT 0F DEFICIHNCY TAXES, SURCHARGES
AND INTEREST WHICH MAY BE ASSESSED PURSUANT T0 THIS SECTION.
ANY   PERSON   LIABLE   FOR   ANY   OF   THE   ACTS   0R   OMISSIONS
PROHIBITED  UNDER  THIS  SECTION  SHALL  BE  CRIMINALLY  LIABLE
AND PENALIZED UNDER SI]CTI0N 254 0F THIS CODE. ANY PERSON WHO
WILLFULLY AIDS OR ABETS IN THE COMMISSION OF ANY SUCH ACT 0R
OMISSION SHALL BE CRIMINALLY LIABLE IN THE SAME MANNER AS
THE PRINCIPAL.
IF  THH  OFFENDER  IS  NOT  A  CITIZEN  0F  THH  PHILIPPINES,  HE/SHE
SHALL BE DEPORTED IMMEDIATELY AFTER SERVING THE SENTENCE,
WITHOUT FURTHER PROCEEDINGS FOR DEPORTATION
SEC.  2.  Sepcrra6j/i.fj; C/cy%se.  - If any provision or part of this Act is declared invalid or
unconstitutional,  such  declaration  shall  be  confined  in  its  operation  to  the  clause,  sentence,
paragraph,orpartthereofdirectlyinvolvedinthecase,whereasthepartsorprovisionsnotaffected
thereby shall remain in full force and effect.
?BF...3.I.mplementin^g_PulesandRequlations.-Widinr\inety(90)daysfrontheeffectivky
of this Act, the Secretary of Finance, upon the recommendation of the Commissioner of Internal
Revenue, shall promulgate the necessary rules and regulations for its effective implementation.
Failure to promulgate the rules and regulations shall not prevent the implementation of this Act
upon its effectivity.
SEC.  4.  Ejorecfjvz.r);.  -  This  Act  shall  take  effect  fifteen  (15)  days  after  its  complete
publication in the Official Gazette or in a newspaper of general circulation.
Approved,