Senate panel rejects lower excise taxes on tobacco, vapes

The Senate Committee on Ways and Means concluded after three hearings that lowering excise taxes on tobacco and vape products would not effectively curb illicit trade.

Committee Chairman Senator Sherwin Gatchalian emphasized the need for stronger enforcement, incentives for enforcement agencies, and local government unit involvement to address illicit trade issues, recommending instead a single tax rate on vapor products and an ad valorem tax on vaping devices.

During Monday's committee deliberations, Gatchalian vowed to block House Bill 11360, which proposes reducing excise taxes on cigarettes, tobacco, heated tobacco, and vapor products, stating that such cuts will not solve the country's cigarette smuggling problem.

Gatchalian said he would not allow the bill’s cigarette component to be included in the bicameral conference committee during his tenure as chairman of the Ways and Means Committee, emphasizing the need for increased funding for anti-smuggling teams from various government agencies.

The senator also called for a unitary system for vape products to prevent technical smuggling and ensure consistent regulation.

Senator Pia Cayetano agreed with Gatchalian's position, stressing that reducing taxes does not address health costs but undermines the government’s ability to fund essential health services.