NEARLY all vape brands monitored in the local market are operating without registration, according to the Department of Trade and Industry (DTI), which said 292 out of 313 brands-or 93 percent-remain unregistered.
Trade Assistant Secretary Marcus Valdez II disclosed the figures during the August 25 House of Representatives Committee on Ways and Means hearing on tobacco and vapor excise taxes, where lawmakers and government agencies examined the growing illicit market and proposals to simplify the tax structure for vapor products.
‘From our survey, there are 313 vape brands in the market; about 292 are not registered. So, it’s at 93 percent,’ Valdez said.
He said the number of compliant brands could shrink further. Of the 18 registered vape brands he previously cited, two-Shift and Chillax-are now subject to cancellation, consistent with findings submitted by the Bureau of Customs (BOC) to the committee.
The DTI official said companies had been given an opportunity to comply with registration requirements, but some continued to sell their products without doing so. He stressed that the agency filed charges and imposed penalties against violators.
Valdez also drew a distinction between legitimate retailers and illicit or noncompliant sellers as the committee examined concerns over vapor products being sold to minors.
‘I don’t think legitimate traders would be selling to minors. During our monitoring we would see retailers in the malls where they have explicit signs saying that minors are not allowed to enter. I know for a fact that in the big malls they are refusing to cater to minors. But for the establishments outside malls, here you find them [illicit sellers] in the strip malls or in the streets,’ Valdez said.
‘It’s been our experience that when we monitor during daytime these establishments are closed, they open at night when most of the government workers are already at home,’ he added.
The scale of unregistered products prompted lawmakers to examine whether the existing tax structure itself has contributed to noncompliance.
Marikina Rep. Romero Federico Quimbo of Marikina said the significant tax disparity between nicotine salt and freebase products has been a key reason why few nicotine salt brands have registered with the DTI.
‘They will not register because the tax is too high. It’s not because of the preferred chemical composition,’ Quimbo said.
The DTI supported proposals to unify excise tax rates for nicotine salt and traditional freebase vapor products. The Department of Finance (DOF), Bureau of Internal Revenue (BIR), and BOC similarly backed replacing the current two-tier system with a unified rate to strengthen enforcement, while leaving the specific rate for further discussion.
Party-list Rep. Roberto Nazal of Bagong Henerasyon said committee members had already found common ground on the role of the two-tier structure in creating opportunities for revenue leakage.
‘Based on earlier manifestations by our committee members, we’ve established that the current two-tier system enabled or allowed a tax leakage. Some are in agreement that a single tier will plug that loophole,’ Nazal said.
Cagayan de Oro Rep. Rufus Rodriguez also cited BIR records showing no payments under nicotine salt despite the separate tax category. He called for a unified P15-per-milliliter rate that would generate collections while reducing incentives for consumers to move toward illicit products.
At the same time, lawmakers raised the need to consider how the eventual rate would compare with the tax treatment of cigarettes.
Quezon City Rep. Jesus Manuel Angel Suntay cited mature markets where cigarettes and vapor products are subject to different tax burdens and urged fiscal agencies to consider the reasoning behind those policies.
‘Mr. Chair, I’m trying to rationalize why in a lot of European countries, the tax rates are different between traditional cigarettes and vape products. There should be a reason. They have more advanced studies. They are more mature when it comes to taxation [of these products]. But here, why do we want to equalize the two categories? They should have a reason. I believe that when the wheel is not broken, we should not reinvent it,’ Suntay said.
Economist Bienvenido Oplas reinforced the point with international examples, citing excise differentials between cigarettes and e-cigarettes of 45 percent in Indonesia, 96 percent in the UK, and 100 percent in New Zealand.
Government enforcement data presented at the hearing meanwhile showed the extent of continuing operations against illicit tobacco and vapor products.
BIR figures showed 6,196 enforcement activities in 2026 involving tobacco and vape products, with P1.7 billion in excise taxes due. This compared with 2,318 activities and P122 million recorded in 2025.
BOC data showed 253 tobacco seizure cases valued at P10 billion in 2026, compared with 317 cases worth P1.87 billion in 2025. For vapor products, the agency recorded 18 seizure cases valued at P1.6 billion in 2026, versus 37 cases worth P649 million the previous year.
Lawyer Dondanon Galera, Head Revenue Executive Assistant of the BIR, said the agency’s enforcement experience points to a continuing increase in illicit products being detected.
‘Base doon sa experience namin, padami nang padami ang huli namin ng illicit products,’ Galera said.
Nazal said this enforcement environment must be considered when Congress determines the appropriate tax rate, warning that setting it too high could undermine both revenue objectives and efforts against illicit trade.
‘As mentioned by the Chairman, we do not want to overtax to the point that we will promote further smuggling and discourage investors from investing in our country,’ Nazal said.
‘That beyond a certain rate, we may not be raising more revenue at all but simply pushing consumers in volume to the illicit market,’ he added.