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House to repeal law imposing taxes on vape

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By Ben Rosario

In a swift reaction to President Duterte’s strong stance against the use of heated tobacco and electronic cigarettes, the House of Representatives will push for the repeal of a law imposing taxes on these products.

House of Representatives (Congres PH)

House of Representatives (Congress PH)

Albay Rep. Joey Sarte Salceda said that while government stands to lose P1.4 billion by repealing Section 2 of Republic Act 11346, congressmen will heed Duterte’s move to ban heated tobacco, vape, and e-cigarette products by likewise deleting any reference to the said products in the new tax bill that was approved by the Lower House last August.

Among others, House Bill 1026 provides for an increase in taxes imposed on the products that Duterte wanted to ban due to serious health concerns on the users.

“We don’t recognize vapes anymore, just like there are no taxes on prostitution,” said Salceda.

The repeal of laws acknowledging vape products as taxable will pave the way for the government to impose a total ban on them.

Under Salceda’s plan, all references to vape, heated tobacco, and e-cigarettes in  HB 2016 will be deleted when the bill reaches the bicameral conference committee.

“In the bicameral conference committee hearing [of House Bill 1026 ], the House Committee on Ways and Means will seek the repeal of Section 2 of Republic Act 11346 to implement the position of the President to ban vape and heated tobacco products,” he said.

Duterte signed RA 11346 into law only last July, a month prior to the Lower House passage of HB 1026 which proposes to amend RA 8424 or the National Internal Revenue Code (NIRC).

RA 11346, which also amends the NIRC, provides for increases in the excise taxes imposed on heated tobacco and vape products, among other so-called “sin products.”

Under this law, taxes from the sin tax products shall be alloted for the implementation of the Universal Health Care Law.

“We will offset [the losses] from alcohol products. So I don’t think we will allow the UHC to be jeopardized by the ban. In fact, it can be helpful if the DOH [Department of Health] can implement the ban on vapes,” explained Salceda.

RA 11346, signed by President Duterte in July, imposes a new tax on electronic cigarettes, including heated tobacco and vapor products.

The law imposes a minimum P10 excise tax for 0-10 ml of liquid solution or gel starting Jan. 1 next year. Every 10.o1-20 ml is taxed P20; 20.01-30 ml, P30; 30.01-40 ml, P40; 40.01-50 ml, P50; and for more than 50 ml, P50 plus P10 for every additional 10 ml. Starting Jan. 1, 2021, the rate will be increased by 5 percent every year.

“Tax policy will no longer be one of the state tools in controlling the negative effects of vape on health. It becomes now totally a health issue, no longer a tax issue. We don’t recognize vape anymore as products that are being taxed. Just like there are no taxes on prostitution,” said Salceda.

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