Food & Beverage

93% of vape brands unregistered as DTI weighs tax harmonization

The Department of Trade and Industry reported that 93% of vape brands in the Philippines are unregistered, prompting lawmakers to consider a unified excise tax. Other developments include price freezes in calamity areas, MSME financing gaps, and digital notarization reforms.

By the MMI Food & Beverage Desk

The Department of Trade and Industry (DTI) told a congressional hearing that 93 percent of vape brands sold in the Philippines are unregistered, a disclosure that is pushing lawmakers toward a single-tier excise tax on vapor products. Trade Assistant Secretary Marcus Valdez II said the agency's monitoring found 313 vape brands in circulation, of which 292 were not registered with the DTI. The revelation came during a House Committee on Ways and Means hearing on excise taxes for tobacco and vapor products, where legislators and regulators called for tougher enforcement and harmonized taxes. Valdez noted that the DTI had allowed a compliance period, but some brands continued selling without registering, and formal charges are now being prepared. Two of the 18 previously registered brands, Shift and Chillax, face cancellation, consistent with findings from the Bureau of Customs. The hearing underscores a persistent enforcement gap in a market that has grown rapidly since the passage of the Vape Law in 2022, which transferred regulatory oversight of e-cigarettes from the Food and Drug Administration to the DTI. The proposed single-tier tax would replace the current multi-tier system that taxes devices and liquids differently, aiming to reduce the price gap between registered and unregistered products that fuels the illicit trade. For the retail sector, the high rate of noncompliance signals a market where legitimate businesses face unfair competition from unregistered players, and where consumers may be exposed to unregulated products. The DTI's move to file charges and impose penalties after the compliance deadline suggests a tougher stance, but the effectiveness of enforcement remains to be seen. The read for the sector is that vape retailers and importers who have not registered face imminent legal and financial risk, while those who are compliant may benefit from a leveling of the playing field if the tax harmonization proceeds. The hearing also highlighted the challenge of regulating a product category that straddles consumer goods and public health, with the Department of Health and other agencies likely to weigh in on the tax structure. The outcome of the legislative process will determine whether the market consolidates around registered brands or continues to be undermined by illicit sellers. The DTI's data, drawn from its own monitoring, provides a baseline for measuring progress in the coming months. The agency's willingness to name specific brands facing cancellation signals a shift from passive compliance periods to active enforcement. For communicators in the retail and consumer goods space, the key message is that registration and compliance are not optional, and that the government is moving to close the loopholes that have allowed unregistered products to flourish. The hearing also drew attention to the broader issue of excise tax evasion, which costs the government revenue and undermines public health objectives. The proposed single-tier tax, if enacted, would simplify the tax structure and make it harder for unregistered brands to undercut compliant ones. The read for the sector is that the regulatory environment for vapes is tightening, and businesses should prepare for stricter oversight and potential tax changes. The DTI's announcement also has implications for consumers, who may face higher prices for registered products if taxes are harmonized, but who would also gain assurance of product safety and quality. The balance between public health, revenue generation, and business viability will be the central tension in the legislative debate. The hearing's outcome is uncertain, but the direction is clear: the era of lax enforcement in the vape market is ending. The DTI's data, drawn from its own monitoring, provides a baseline for measuring progress in the coming months. The agency's willingness to name specific brands facing cancellation signals a shift from passive compliance periods to active enforcement. For communicators in the retail and consumer goods space, the key message is that registration and compliance are not optional, and that the government is moving to close the loopholes that have allowed unregistered products to flourish. The hearing also drew attention to the broader issue of excise tax evasion, which costs the government revenue and undermines public health objectives. The proposed single-tier tax, if enacted, would simplify the tax structure and make it harder for unregistered brands to undercut compliant ones. The read for the sector is that the regulatory environment for vapes is tightening, and businesses should prepare for stricter oversight and potential tax changes. The DTI's announcement also has implications for consumers, who may face higher prices for registered products if taxes are harmonized, but who would also gain assurance of product safety and quality. The balance between public health, revenue generation, and business viability will be the central tension in the legislative debate. The hearing's outcome is uncertain, but the direction is clear: the era of lax enforcement in the vape market is ending.

Dominant — The vape registration issue dominates the captured set, with two major online news outlets (Inquirer and Manila Times) covering the DTI's disclosure and the legislative response. The story's prominence reflects its regulatory and public health implications, as well as the significant advertising-equivalent value of the coverage (₱685,692 and ₱240,124 respectively). The narrative is driven by the government's enforcement push and the potential for new taxes, which directly affects retailers and consumers.

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