Manila – The chairperson of the House Ways and Means Committee, Albay Rep. Joey Salceda, has called on the Bureau of Internal Revenue (BIR) to investigate an e-cigarette maker, suspected of tax evasion and tax fraud, in connection with its product, FLAVA.
According to Philippines News Agency, During a recent hearing, the committee addressed the discovery of about 1.4 million 10-ml. disposable vapes labeled FLAVA in a warehouse in Valenzuela City. The Bureau of Customs estimates the total value of these goods at PHP1.43 billion, including an estimated PHP700 million product value and PHP728 million worth of excise tax.
Salceda has asked the BIR to coordinate with the Food and Drug Administration and the Bureau of Product Standards of the Department of Trade and Industry to validate FLAVA's product specifications. There is suspicion that FLAVA may be mislabeling its products as conventional freebase e-cigarettes instead of the salt nicotine variety, which carries a different tax rate under Republic Act No. 11467.
Salceda highlighted that if FLAVA is found liable for tax evasion, it could face a penalty of 10 times the amount of evaded taxes, potentially amounting to PHP7.3 billion. He also noted discrepancies in the product's marketing, suggesting that FLAVA might be a more highly concentrated nicotine salt product.
The committee chair also requested that the Department of Finance and BIR develop strategies to combat illicit trade in electronic cigarettes. The goal of the hearing was not only to investigate a single company but to find solutions to prevent illicit trade that can harm legitimate businesses and allow unregulated dangerous substances into the market.
