The Department of Trade and Industry (DTI) revealed that an overwhelming majority of vape brands in the local market are operating without official registration. The finding came as lawmakers and fiscal authorities expressed support for establishing a single excise tax rate on vaporized nicotine products to curb widespread illicit trade.
During a hearing of the House Committee on Ways and Means focused on tobacco and vape taxation, DTI Assistant Secretary Marcus Valdez II presented agency market monitoring data showing that 292 out of 313 surveyed vape brands lacked proper DTI registration.
“From our survey, there are 313 vape brands in the market; about 292 are not registered. So, it’s at 93%,” Valdez said.
Valdez noted that while 18 brands were previously registered, two of them—Shift and Chillax—are currently undergoing cancellation proceedings, consistent with findings cited by the Bureau of Customs.
Addressing the rampant non-compliance, he explained that while the DTI provided grace periods for registration, non-compliant sellers continued operations, prompting formal administrative charges and financial penalties.
When questioned regarding underage sales, Valdez highlighted the operational contrast between compliant traders and illicit vendors.
“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.
Committee chairperson and Marikina City 2nd District Representative Miro Quimbo observed that the existing tax disparity between product types encourages sellers to remain unregistered, particularly under the heavily taxed nicotine salt category.
“They will not register because the tax is too high. It’s not because of the preferred chemical composition,” Quimbo said.
The DTI, alongside the Department of Finance, Bureau of Internal Revenue, and Bureau of Customs, endorsed replacing the current two-tiered system with a single uniform tax rate. Bagong Henerasyon Party-list Representative Roberto Nazal noted that lawmakers identified the two-tier structure as the primary driver of revenue losses.
“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.
Cagayan de Oro City 2nd District Representative Rufus Rodriguez proposed setting a uniform tax rate of ₱15 per milliliter for all vapor products, pointing out that BIR records currently show zero tax collections under the nicotine salt classification due to misdeclaration and non-compliance.
Meanwhile, Quezon City 4th District Representative Jesus “Bong” Suntay urged tax authorities to examine benchmark practices in developed economies that maintain a distinct price differential between traditional cigarettes and vapor alternatives.