BIR files ₱8.7 billion tax evasion cases vs illicit vape traders
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The Bureau of Internal Revenue (BIR) on Tuesday filed criminal charges before the Department of Justice (DOJ) against large-scale illicit vape businesses for tax evasion amounting to over ₱8.7 billion.
At the DOJ, BIR Commissioner Romeo D. Lumagui Jr. said, “today, the BIR has filed criminal cases for tax evasion against large-scale illicit vape businesses. They have failed to pay 8.7 billion pesos in taxes. We have warned all those who want to enter the vape industry to register with the BIR and pay proper taxes. This is what happens when you keep violating our tax laws.”
The criminal complaints were filed against the traders of vape brands Flava, Denkat, and Flare. The cases cover a total tax deficiency of ₱8,681,028,850.82, primarily involving unpaid excise taxes.
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 of the National Internal Revenue Code of 1997. The cases also seek to recover the unpaid excise taxes.
The filing of these criminal cases forms part of the BIR’s intensified campaign against the illicit vape trade. The agency continues to conduct raids and urges the public to report businesses selling illegal vape products, regardless of size.
Alongside the rise of illicit vape trading, the BIR also reminded celebrities and influencers endorsing vape products to ensure the brands they promote are legitimate and tax-compliant.
According to the BIR chief, “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. Illicit vape ends now.”
Since the BIR implemented the vape stamp system and coordinated with the Department of Trade and Industry on tighter product controls, vape excise tax removals and payments have increased dramatically since June 2024.
For 2023, 11.2 million milliliters of vape products were removed or ₱223.75 million in excise taxes charged. In June 2024, when the BIR administered the excise stamp on vape products, removals surged to 130 million milliliters and resulted in ₱942 million in collections.
Today’s filing is part of a broader effort by the BIR to crack down on illicit trade and tax evasion across multiple industries. The agency recently joined the Bureau of Customs in the destruction of ₱3.26 billion worth of smuggled vape products. It also filed an ₱8.5 billion tax evasion case following the raid of an illegal cigarette factory in Pampanga, and it continues to pursue illicit cigarette traders nationwide through warehouse seizures and criminal prosecutions.
The BIR’s enforcement activities also extend to the campaign against “ghost receipts,” with the DOJ recently filing eight criminal charges against a major government contractor based on the BIR’s Run After Fake Transactions (RAFT) Task Force investigation. These sustained efforts form part of a government campaign not only to recover lost revenues but also to protect public health and level the playing field for legitimate businesses.
