February 4, 2023

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₧1.2-B Tax Evasion Lawsuit Filed Against Vape Dealers

The Bureau of Internal Revenue (BIR) last Tuesday filed a pesos 1.2 billion tax evasion indictment with the Department of Justice (DOJ) against five vape dealers who were previously caught selling contraband and untaxed vape products.

Wei Feng Bao, Christina Poa, Sandoval Severino Briones, Jimmy Go and Bibiano Lesaca were named as defendants in the complaint.

According to the BIR, these individuals are subject to preliminary investigations for violations of Republic Act (RA) 111346 (An Act Increasing the Excise Tax on Tobacco Products, Imposing Excise Tax on Heated Tobacco Products and Vapor Products and Increasing the Penals for Violations of Provisions on Article, subject to excise duties) and the 1997 National Internal Revenue Code.

BIR Commissioner Romeo D. Lumagui Jr., who personally led the filing of the complaint, said the government is very serious about cracking down on illegal e-cigarette dealers who don’t pay the correct taxes.

It is the first tax evasion filed under the administration of President Ferdinand R. Marcos Jr.

“I hope this is another warning for those who believe they can continue to evade paying their taxes. We are hands-on and focused in our work, and we take that very seriously,” said Lumagui, an attorney.

He also urged those who want to sell vape products and cigarettes to register; otherwise they will be considered illegal and must be confiscated and appropriate charges brought.

loss of revenue

The filing of the complaint stemmed from the raid conducted by a specialized team on the defendant’s on-site and online business operations in Binondo, Manila, last month.

The operation resulted in the seizure of approximately 50,000 to 100,000 units of vape (a vapor inhalation device containing nicotine and flavorings), 899 cases of untaxed excise items consisting of 175,050 pods and 61,400 bottles of flavored juice.

The estimated value of the confiscated items ranged from 15 to 30 million pesos, with taxes and penalties reaching about 1.2 billion pesos.

BIR previously estimated that e-cigarette smuggling costs the government about 1.4 billion pesos annually in revenue.

“The popularity and widespread use of vape as an alternative to smoking has enticed many unscrupulous businessmen and distributors to import and sell it illegally,” Lumagui said. “As a piece of advice, they should use the right and lawful channels and make sure they are fully compliant. Otherwise, we will confiscate their illegal products and file criminal charges against them accordingly.”