BIR sues vape firms for nonpayment of P8.68B in taxes
The Bureau of Internal Revenue (BIR) on Tuesday filed criminal complaints before the Department of Justice (DOJ) against illegal vape businesses accused of not paying P8.68 billion in taxes.
Charged with violating the National Internal Revenue Code of 1997, as amended, were companies operating under the brand names Flava, Denkat and Flare, specifically Section 263 (unlawful possession of vape products without payment of excise), Section 254 (tax evasion) and Section 255 (failure to file excise tax returns).
BIR Commissioner Romeo Lumagui Jr. told reporters the tax evasion scheme was uncovered through covert operations, which led to the seizure of thousands of vape products lacking proper tax stamps.
“It was confirmed that the excise [taxes] on these products were not paid. All of them are illicit,” Lumagui said.
He also warned retailers—both those operating in physical stores or online—that they will likewise face legal consequences if they are caught distributing vape products with unpaid excise or without proper tax stamps.
“We’ve seen many sellers hiding products in houses and warehouses, and conducting sales from there. We’re closely monitoring those activities. We’ve also received reports confirming that these illegal transactions are happening in residential areas, which is why we’re keeping a close watch,” Lumagui said.
He added that the BIR is monitoring online platforms to ensure that all illicit vape products, whether sold in physical stores or online, are traced, inspected, confiscated and that legal action is pursued against those involved.
To help resellers identify compliant products, Lumagui advised the public to check for Tamaraw tax stamps on vape packaging, which indicate payment of excise and compliance with BIR regulations.
He also announced plans to implement a digital track-and-trace system to make counterfeiting tax stamps more difficult.
Individuals currently in possession of untaxed vape products can choose to voluntarily surrender these, Lumagui said.
He added that updated lists of legally compliant vape brands are available from both the BIR and the Department of Trade and Industry (DTI) to guide sellers in lawful operations.
At the same time, he urged prospective vape retailers to ensure the legitimacy of the products they sell.
“Register with the DTI and the BIR, and make sure that excise [taxes] are fully paid—because if not, we will not stop pursuing importers and retailers. Whether big or small, you will be charged and your products will be confiscated. So let’s make sure the excise [taxes] are paid so we can run our businesses peacefully,” he said.
