Philippines Proposes Higher Taxes on Vapes and Sugary Drinks to Fund Tax Relief

Philippines tobacco excise tax 2025

The Philippine Department of Finance has proposed tax increases on e-cigarettes, vapor devices, alcohol, and sugary drinks. Introduced during a congressional hearing, these measures aim to offset revenue losses from President Ferdinand Marcos Jr.’s tax relief proposals, which include raising the tax-free ceiling for take-home pay.

Finance Undersecretary Karlo Adriano told lawmakers that the government expects an average annual revenue gain of 48 billion pesos ($785 million) over the next four years. While the tax relief measures will cost the state 81.7 billion pesos annually, the new levies on vapes, sodas, and luxury items are projected to generate up to 130 billion pesos.

The announcement immediately impacted the stock market. Shares of JG Summit Holdings Inc. dropped 3.5%, while San Miguel Corp. declined 1.6%. Debt watchers had previously warned of risks to the nation’s fiscal health if the administration’s relief measures were not paired with new revenue-generating policies.

Beyond e-cigarettes and distilled spirits, the government is looking to tax ice cream, natural fruit juices, plastics, and private jets, while raising the luxury goods tax from 20% to 25%.

Matthew Ma
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