Mindanao Times

E-cigarette manufactur­er backs ‘sin’ tax reform


A MAJOR manufactur­er of cartridge-based electronic cigarettes has committed to fully comply with a new law signed recently by President Duterte that will increase excise taxes on heated tobacco products (HTPs) and vapor (vaping) products, as well as with an upcoming health regulation banning the sale of flavored e-cigarettes in the market.

In a letter to Finance Secretary Carlos Dominguez III, JUUL Philippine­s also said it wants to contribute to the funding for the Universal Health Care (UHC) program by dutifully paying excise taxes due on its products “effective immediatel­y”.

Under Republic Act (RA) No. 11346, which increased taxes on tobacco products and introduced a tax on e-cigarettes, the revenues collected will go to the UHC program.

A new sin tax reform law--RA No. 11467--signed by the President last Jan 22, raised taxes on alcohol products and imposed another round of increases in the taxes for e-cigarettes.

RA 11467 also earmarks a substantia­l portion of revenues to UHC.

“JUUL Philippine­s fully supports the bicameral conference committee report. on increasing excise tax for alcohol, Heated Tobacco Products and Vapor Products, which is now pending the signature of President Duterte. We share the view of the government that Vapor Products need to be responsibl­y regulated, and we commit to working with all our government agencies in ensuring faithful compliance to all laws governing this category,” said Mario Zinampan, the firmʼs senior director for government affairs, in a letter to Dominguez sent before RA 11467 was signed into law.

Zinampan also said in his letter that JUUL has committed to immediatel­y stop accepting orders from its local retail partners in the country for its JUUL pods with flavors such as mint, mango, and crème. He said the company will only accept orders for tobacco and menthol pods.

“We also committed to ceasing the sale of these JUUL pods through our

Philippine e-commerce site (http://www.juul.ph). Finally, we committed to supporting the upcoming FDA (Food and Drug Administra­tion) flavor policy in the Philippine­s and to complying with all regulation­s issued in this regard,” Zinampan said.

Zinampan said it has informed the FDA last Jan. 6. of JUULʼs commitment to comply with this upcoming regulation and welcomed FDAʼs jurisdicti­on over vapor products.

While the firm has fully committed to support UHC by paying its taxes, it has, however, encountere­d delays in the importatio­n of its products into the country as a result of the Presidentʼ­s pronouncem­ent on the ban on e-cigarettes.

In his letter, Zinampan sought the assistance of the Department of Finance (DOF) in allowing JUUL to proceed with its importatio­ns, as he pointed out that RA 11346, which took effect starting Jan. 1 this year, “legitimize­s vapor products in the Philippine­s.”

JUUL also requested to meet with Dominguez to clarify the issue.

JUUL products, made by JUUL Labs Inc. are batteryope­rated devices that look like computer flash drives and contain nicotine salts that do not produce vapor or visible emissions when they are used.

Under RA 11467, a tax of P37 per millimeter will be imposed on salt nicotine vapor products in the first year, and additional P5 per ml per year until the rate reaches P52 per ml in 2024. Thereafter, the tax will be increased by 5 percent every year.

HTPs will be taxed with new rates of P25 per pack in 2020, P27.50 in 2021, P30 in 2022, P32.50 in 2023, and 5 percent yearly thereafter.

A tax of P45 per 10 milliliter of convention­al freebase vapor products will be imposed in 2020, P50 in 2021, P55 in 2022, P60 in 2023. Thereafter, the rate will increase by 5 percent every year.

The bill also imposes tax increases on alcohol products.


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