BIR trains sights on vape industry in anti-illicit trade campaign

The Philippine government’s crackdown on illicit trade is intensifying, with tax authorities vowing to press forward with criminal charges against unregistered and non-compliant players in the growing vape market, following the Bureau of Internal Revenue’s (BIR) filing of an ?8.7 billion tax evasion case before the Department of Justice (DOJ).

In a television interview on Thursday, BIR Commissioner Romeo Lumagui Jr. stressed that “hindi natin tinitigilan ang kampanya natin laban sa illicit trade.”

“Kamakailan nagsampa tayo ng kasong kriminal laban sa importers ng vape products na ang brand ay Flava, Flare, at Denkat. Malaki ang tax liabilities na compute natin dito, umaabot mahigit kumulang P8.7 billion pesos,” said the BIR chief.

“Patunay ito na tuloy-tuloy ang kampanya natin laban sa illicit trade ng vape at hindi namin titigilan ang issue na ito.“

The case, filed before the Department of Justice, involves tax deficiencies amounting to ?8.68 billion. The charges include unlawful possession of vape products without payment of excise tax, tax evasion, and failure to file excise tax returns.

The BIR has increased enforcement actions across the country, building on recent efforts that include the seizure of smuggled vape products and the destruction of ?3.26 billion worth of contraband in coordination with the Bureau of Customs.

“Patuloy pa rin ang gagawin nating pagsampa ng mga kaso sa mga mahuhuli natin na nagbebenta pa rin ng vape products na hindi bayad ang buwis,” said Lumagui, who explained that both sellers and endorsers of untaxed vape products could face legal consequences.

The lawyer pointed out that “lahat ng konektado sa pagbebenta ng vape––dahil illegal nga ang pagbebenta or mere possession ng mga vape products na hindi bayad ng excise tax––ay considered unlawful at may violation under the tax code.”

“So lahat ng mga involved sa pagbebenta ng vape products ay madadamay sa kasong tax evasion.”

The campaign’s reach, Lumagui emphasized, extends beyond distributors and importers. He informed the public that to avoid liability, sellers and endorsers could check on the list of registered vape brands in the BIR website.

“Kaya naman paalala po natin sa mga mage-endorso at sa magiging involved dito sa mga vape products… siguraduhin natin na ang vape products natin ay registrado at nagbabayad ng karampatang buwis,” he warned. Nakatala yan sa ating website kung ano-ano mga brands ang allowed magbenta dahil registrado at bayad ang buwis,” shared Lumagui.

Since the BIR implemented the vape stamp system in June 2024 and tightened coordination with the Department of Trade and Industry, excise tax collections from vape products have increased significantly. In 2023, only 11.2 million milliliters were removed or charged ?223.75 million in excise taxes. That figure jumped to 130 million milliliters and ?942 million in collections just six months after the stamping system was put in place.