BIR sues vape retailers for not paying P711M
The Bureau of Internal Revenue (BIR) filed with the Department of Justice on Wednesday charges of tax evasion, including nonpayment of excise amounting to at least P711.3 million, against retailers of prohibited vape products across the country.
BIR Commissioner Romeo Lumagui Jr. did not specify the individuals or companies that were charged, but he did mention vape brands Flava, Denkat, Flare and Tap Fog.
“The BIR has proven that it will file cases [against] the biggest illicit vape sellers, such as Flava, Denkat, Flare, and Tap Fog,” Lumagui said in a statement. “Today, due to the continuing disobedience of illicit vape retailers, they will suffer the same fate.”
The complaints covered multiple violations of the Tax Code, including tax evasion, unlawful possession or removal of articles subject to excise tax without payment of the tax, and failure to file excise tax returns.
The BIR chief stressed that laws against illegal vape products are now wide-ranging and include not only importers, distributors and retailers, but also celebrity endorsers and social media influencers. The list of registered vape brands is on the BIR website, he added.
DTI warning
Lumagui made the remarks a day after the Department of Trade and Industry (DTI) ordered online shops to remove illegal vape products from their platforms or face imprisonment for at least two years or penalties amounting to at least P2 million.
During a briefing at Malacañang on Tuesday, Director Eryl Royce Nagtalon of the DTI E-commerce Bureau, said the order was issued due to repeated violations of the Consumer Act of the Philippines (Republic Act No. 7394), the Vape Law (RA 11900), regulations of the Department of Health and the Tax Code.
Nagtalon said online selling platforms have been properly informed of the government’s directive to remove all illegal listings in their shops and government teams are already monitoring compliance.
The government, Nagtalon added, has a database of online businesses mandated by the Internet Transactions Act of 2023 (RA 11967), so even if the online sellers change sites, the government would still be able to track them.
Lawyer Frediswenda Benas, chief of the DTI E-commerce Enforcement and Compliance Division, said during the same briefing that around 92,000 listings of illegal vape products have been monitored by the DTI Office for the Special Mandate on Vaporized Nicotine and Non-Nicotine Products, their Devices and Novel Tobacco Products over the past two years.
Benas said that online platforms are deemed solidary liable for illegal items being sold through their sites, and their officials may be slapped with prison time of at least two years and fines of at least P2 million to as much as six years and P5 million.
The BIR noted that its latest set of filings builds on previous enforcement actions that it has been undertaking since last year.
In February 2024, in a case initiated by the BIR, courts ordered the issuance of warrants of arrest against the vape seller Tap Fog and its alleged conspirators. The estimated tax liability was P1.2 billion.
Last April, the BIR filed P8.7 billion worth of tax evasion cases against various large-scale vape businesses, including brands Flava, Denkat and Flare.
“These landmark cases demonstrate the BIR’s commitment to holding big offenders accountable and protecting law-abiding businesses from unfair competition,” Lumagui said. —WITH A REPORT FROM PNA
