Key Points
- House Bill 5207 proposes harmonizing excise tax rates for nicotine salt and freebase vapor products.
- Current rates show a significant disparity of P60.20 per milliliter for nicotine salt versus P6.95 for freebase nicotine.
- Lawmakers estimate the loophole costs the government P14.8 billion annually.
- Industry groups support unified liquid taxation but oppose taxes on vaping devices and hardware.
2Firsts, February 22, 2026
According to manilastandard, Philippine lawmakers are advancing House Bill 5207 (HB 5207), a proposal aimed at harmonizing excise taxes on vapor products and closing what sponsors describe as a significant tax loophole.
The measure is backed by more than 40 lawmakers, including Deputy Speaker Kristine Singson-Meehan. It seeks to address the disparity between nicotine salt and freebase nicotine products. Under current rates, nicotine salt is taxed at P60.20 per milliliter, while freebase nicotine is taxed at P6.95 per milliliter.
Proponents said the difference has encouraged misdeclaration, with some importers allegedly labeling nicotine salt products as freebase to benefit from lower tax rates. Senate Ways and Means Committee Chair Win Gatchalian previously estimated the revenue loss at P14.8 billion annually.
Although regulations introduced in 2024 require internal revenue stamps on all vapor products, non-compliant items remain in circulation, according to the bill’s sponsors. Bureau of Internal Revenue data show that the average excise tax per milliliter fell from P42 in 2021 to P9 in 2025, despite increased reported withdrawals of vapor products.
Bienvenido Oplas Jr., president of Minimal Government Thinkers and international fellow at the Tholos Foundation, said adopting a single tax rate would simplify administration and align Philippine policy with international standards.
The Philippine E-cigarette Industry Association (PECIA) also expressed support for unified taxation of consumable nicotine liquids but argued that excise taxes should not apply to vaping hardware such as devices, chargers and cables. PECIA President Joey Dulay said taxing hardware would amount to double taxation for consumers.
(Cover Image: Win Gatchalian, Senator of the Philippines | image source: wingatchalian.com)
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