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Higher taxes on e-cig, vape eyed by DOF.

By Chino S. Leyco

Users of electronic cigarettes and vape products should brace themselves for higher taxes as the Department of Finance (DOF) prepares a proposal seeking to raise the so-called "sin" levies on these tobacco alternatives.

Following the P10 excise tax on vaping and e-cigarettes approved by the 17th Congress, Finance Secretary Carlos G. Dominguez III said the increase is not yet over as the Duterte administration will submit to Congress a bill that will set a P45 levy on all non-combustible cigarette products.

According to Dominguez, the P10 excise tax is "too low" that is why the government wants to "make it equivalent to cigarettes."

Asked if their proposed hike will be in tranches, the finance chief said the "ideal" is a "one-time" increase.

Last June, the Senate ratified a measure increasing the excise tax on tobacco products, with the inclusion of heated tobacco products and vapor products in its coverage.

"For vapes like Juul, we propose P45 per milliliter. For the typical 0.7 milliliter pod, it will be discounted rate of P31.5," Dominguez said. "For heated tobacco, we propose P45 per pack similar to regular [cigarette] packs."

Dominguez also said the government plans to "limit" the sale of fruit flavored e-cigarettes and vape.

"We also propose limiting availability of e-cigarette/vape juice flavors to those that are similar to regular tobacco and regular menthol cigarettes. There is strong evidence suggesting that many other flavors tend to encourage initiation and heavy use among the young," Dominguez said.

But as early as now, e-cigarette manufacturers signalled their opposition to the forthcoming proposal by the DOF, noting their product is far less harmful than combustible cigarettes, thus should not be subjected to the same level of taxation.

In a statement, the DOF, meanwhile, said this proposal along with other measures in the Duterte administration's legislative agenda are being supported by the Philippines' most prominent business groups and joint foreign chambers.

These include the passage of the remaining packages of the comprehensive tax reform program (CTRP), which focus on reforms in the corporate income tax (CIT) and fiscal incentive system, in property valuation and assessment, and in capital income and financial taxation; plus new excise tax on alcohol.

Other priority measures identified by the groups are the amendments to the Public Service Act, Foreign Investment Act, and Retail Trade Act - all of which are meant to open the domestic economy to more foreign direct investments (FDIs).


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Title Annotation:Business News
Publication:Manila Bulletin
Date:Jul 21, 2019
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