Fix Vape Tax Loophole, Regulate Online Sales

The Philippines is losing billions in potential tax revenue while exposing more youth to harmful products, thanks to a flawed vape tax system and poorly regulated online sales.

The recent Milieu Insight study on nicotine trends in Southeast Asia painted a troubling picture: while traditional smoking may be declining, alternative nicotine use—particularly vapes—is surging. In the Philippines, 9.5 percent of adults now use e-cigarettes or heated tobacco products. But this shift has not been matched by intelligent regulation or effective enforcement.

One of the biggest loopholes lies in the country’s vape tax structure. The current law taxes ‘freebase’ vape liquids 8.7 times lower than ‘nicotine salt’ variants, even though the latter is more popular and potent. This massive tax gap invites misdeclaration and fraud, allowing importers and sellers to falsely label nicotine salt products as freebase to avoid higher duties.

The result? Government coffers are drained of revenue, while the public remains exposed to products that escape the scrutiny of proper taxation and regulation.

House Bill 11360 in Congress is a welcome development. By creating a single tax rate for all vape liquids, it aims to plug this loophole and level the playing field. Congress must act swiftly. Every month of delay is another month of foregone revenue and regulatory evasion.

But tax reform alone won’t be enough.

Vapes are no longer bought behind counters. They’re bought behind screens. Platforms like Shopee, Lazada, and TikTok Shops have become digital smoke shops, offering flavored vape products to users of all ages—often without proper age verification. The study confirms this trend: younger users are flocking to e-commerce and even messaging apps like Telegram to access vapes, bypassing brick-and-mortar checks and government oversight.

This ease of access fuels early addiction. Slick marketing, fruity flavors, and influencer content on TikTok and other platforms make vaping look cool, clean, and harmless. Regulation is not keeping up with the speed and reach of the digital marketplace.

The Department of Trade and Industry and the Bureau of Internal Revenue must coordinate with e-commerce platforms to enforce age checks, verify licensed sellers, and crack down on unregistered imports. These companies must be held accountable under existing consumer protection and taxation laws—or new ones, if necessary.

We can no longer treat vaping as a fringe trend. It is a billion-peso industry slipping through the cracks of outdated laws and digital loopholes.

The government must fix the tax structure, enforce online regulation, and treat alternative nicotine with the same seriousness as cigarettes.

Otherwise, we risk a new generation addicted not just to nicotine—but to the ease of buying it with a swipe.