VAPE businesses bearing the brand names Flava, Denkat and Flare are in hot water after the Bureau of Internal Revenue yesterday filed criminal charges against them before the Department of Justice for allegedly evading payment of taxes worth P8.7 billion.
BIR Commissioner Romeo Lumagui Jr. personally led the filing of the criminal charges for tax evasion.
“Today, the BIR has filed criminal cases for tax evasion against large-scale illicit vape businesses. They have failed to pay P8.7 billion in taxes. We have warned all those who want to enter the vape industry to register with the BIR and pay the proper taxes. This is what happens when you keep violating our tax laws,” Lumagui told reporters after filing the cases, adding that those charged were also the subject of a previous congressional investigation.
He said the amount could have been used by the government to augment its funding for the provision of social services.
“Ngayon pa lang, itong tranche pa lang na ito ang nahuli at nasampahan ng kaso ay umaabot na agad sa around P8.7 billion. Kaya tinataya natin na mahigit pa rito, bilyun bilyon talaga ang nawawala sa gobyerno na sana nagagamit natin sa pondo ng bayan. Marami pa po sanang napaggagamitan nitong pondo na ito (This tranche alone represented P8.7 billion. We estimated that billions more are lost to the government coffers because of this, an amount that could have been used for many things,” he said.
The charges include unlawful possession of vape products without payment of excise tax under Section 263, tax evasion under Section 254, and failure to file excise tax returns under Section 255 in violation of the National Internal Revenue Code of 1997, as amended.
Lumagui said the government is owed around P9 billion, actually, if one is to include the deficiency excise taxes and penalties, which have not been paid by the illicit vape traders.
The BIR chief said more cases will be filed in the next few days against other illicit vape traders in the country.
“We are continuing our monitoring of the vape industry and I assure the public this is not the last time that we will file cases,” he said.
“Expect more criminal cases to be filed against illicit vape traders. Whether your business is large or small, as long as you sell illicit vape, you will be imprisoned. Celebrities and influencers found to be in conspiracy with illicit vape traders will also be imprisoned,” he added.
