Section 3. Section 144 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 11346, is hereby amended to read as follows:

“Sec. 144. Tobacco Products, Heated Tobacco Products, and Vapor Products.—

“(A) Tobacco Products.— x x x

“(B) Heated Tobacco Products.— There shall be levied, assessed and collected on heated tobacco products an excise tax at the rate prescribed below:

“Effective on January 1,2020, Twenty-five pesos (₱25.00) per pack of twenty (20) units or packaging combinations of not more than twenty (20) units;

“Effective on January 1, 2021, Twenty-seven pesos and fifty centavos (₱27.50) per pack of twenty (20) units or packaging combinations of not more than twenty (20) units;

‘Effective on January 1, 2022, Thirty pesos (₱30.00) per pack of twenty (20) units or packaging combinations of not more than twenty (20) units; and

“Effective on January 1,2023, Thirty-two pesos and fifty centavos (₱32.50) per pack of twenty (20) units or packaging combinations of not more than twenty (20) units.

“The rates of tax imposed under this Subsection shall be increased by five percent (5%) every year effective on January 1, 2024 through revenue regulations issued by the Secretary of Finance.

“x x x

“Manufacturers, distributors, and importers of heated tobacco products shall, within thirty (30) days from the effectivity of this Act, and within the first five (5) days of every month thereafter, submit to the Commissioner a sworn statement of the volume of sales and removals for each particular brand of heated tobacco products sold for the three-month period immediately preceding.

“x x x

“If the offender is not a citizen of the Philippines, he/she shall be deported immediately after serving the sentence, without further proceedings for deportation.

“The Food and Drug Administration (FDA) shall periodically determine and regulate, consistent with evolving medical and scientific studies, the manufacture, importation, sale, packaging, advertising, and distribution of heated tobacco products, including banning the sale to nonsmokers or persons below twenty-one (21) years old.

“Selling heated tobacco products to persons below twenty-one (21) years old shall be prohibited, and shall be punished with a fine of Ten thousand pesos (₱10,000.00) and imprisonment of thirty (30) days.

“x x x

“Manufacturers, distributors, importers, and sellers of heated tobacco products are given a period of eighteen (18) months from the effectivity of the implementing rules and regulations (IRR) of this Act to comply with the requirements under such IRR.

“x x x

“The Bureau of Internal Revenue is mandated to issue a revenue regulation prescribing the floor price or the minimum price of heated tobacco product taking into account the sum of the excise and value-added taxes as provided herein.

“(C) Vapor Products.— There shall be levied, assessed and collected on vapor products an excise tax at the rates prescribed below:

“(1) Nicotine Salt or Salt Nicotine.— There shall be levied, assessed and collected on any liquid substance, regardless of nicotine content, including nicotine-free liquids or any similar product, further classified as nicotine salt or salt nicotine, an excise tax based on the following schedules:

“Effective on January 1, 2020, Thirty-seven pesos (₱37.00) per milliliter or a fraction thereof;

“Effective on January 1, 2021, Forty-two pesos (₱42.00) per milliliter or a fraction thereof;

"Effective on January 1, 2022, Forty-seven pesos (₱47.00) per milliliter or a fraction thereof; and

“Effective on January 1,2023, Fifty-two pesos (₱52.00) per milliliter or a fraction thereof.

“Provided, That the rates of tax imposed under this Subsection shall be increased by five percent (5%) every year effective on January 1, 2024, through revenue regulations issued by the Secretary of Finance.

“(2) Conventional ‘Freebase’ or ‘Classic’ Nicotine.— There shall be levied, assessed and collected on any liquid substance, regardless of nicotine content, including nicotine-free liquid or any similar product, further classified as conventional ‘freebase’ or ‘classic’ nicotine an excise tax based on the following schedules:

“Effective on January 1, 2020, Forty-five pesos (₱45.00) per ten (10) milliliters or a fraction thereof;

“Effective on January 1, 2021, Fifty pesos (₱50.00) per ten (10) milliliters or a fraction thereof;

‘Effective on January 1, 2022, Fifty-five pesos (₱55.00) per ten (10) milliliters of a fraction thereof; and

‘Effective on January 1, 2023, Sixty pesos (₱60.00) per ten (10) milliliters or a fraction thereof.

“Provided, That the rates of tax imposed under this Subsection shall be increased by five percent (5%) every year effective January 1, 2024, through revenue regulations to be issued by the Secretary of Finance.

“x x x

“If the offender is not a citizen of the Philippines, he/she shall be deported immediately after serving the sentence, without further proceedings for deportation.

"The FDA shall periodically determine and regulate, consistent with evolving medical and scientific studies, the manufacture, importation, sale, packaging, advertising, and distribution of vapor products, including banning the sale to nonsmokers or persons below twenty-one (21) years old, and banning of flavorings.

“Provided, That vapor products which exceed sixty-five milligrams of nicotine per milliliter (65 mg/ml) of liquid or gel, or which does not exceed this limit but seeks to make health claims, shall be subject to additional requirements as the DOH and the FDA may impose: Provided, however That this shall not diminish the regulator powers of the FDA over vapor products, regardless of nicotine content.

“Selling vapor products to persons below twenty-one (21) years old shall be prohibited, and shall be punished with a fine of Ten thousand pesos (₱10,000.00) and imprisonment of thirty (30) days.

“The manufacture, importation, sale and distribution of vapor products with flavoring other than plain tobacco or plain menthol, shall be prohibited.

" “x x x

“Manufacturers, distributors, importers, and sellers of vapor products are given a period of eighteen (18) months from the effectivity of the IRR of this Act to comply with the requirements under such IRR.

“x x x

“The Bureau of Internal Revenue is mandated to issue a revenue regulation prescribing the floor price or the minimum price of vapor products taking into account the sum of the excise tax and value-added tax as provided herein.”