BIR files complaint vs illegal vape traders

MANILA, Philippines — The Bureau of Internal Revenue (BIR) has filed criminal complaints against illegal vape traders from whose establishments in Tondo, Manila authorities seized some P30 million worth of vape products during a raid last month.

BIR Commissioner Romeo Lumagui Jr. filed the complaints before the Department of Justice yesterday against Wei Fong Bao, also known as Sofi Chua; Christina Poa, Sandoval Severino Briones, Jimy Go and Bibiano Lesaca.

Separate raids by BIR agents and the police last month led to the seizure of approximately 50,000 to 100,000 units of vapes, 899 boxes of untaxed excisable articles composed of 175,050 pieces of pods, and 61,400 pieces of bottled flavored juice.

They will undergo preliminary investigation for violation of Republic Act No. 11346 or the law imposing excise taxes on heated products and vapor products, as well as of the National Internal Revenue Code of 1997.

If found guilty, the respondents may face prison terms of not less than four years and not more than six years.

“I hope this serves as yet another warning to those who think that they can continue to evade the payment of their taxes. We are hands-on and focused in our job, and we take this very seriously,” Lumagui told reporters.

Apart from the criminal cases filed against them, the traders are also facing civil cases in the aggregate amount of P1.2 billion inclusive of fines and penalties.

“The popularity and wide use of vape as a smoking alternative have tempted many unscrupulous businessmen and traders to import and sell them illegally. As a word of advice, they should go through the proper and lawful channels, and make sure that they are in full regulatory compliance. Otherwise, we will confiscate their illegal products and file the corresponding criminal charges against them,” he added.

Earlier, the BIR said the government loses about P1.4 billion in revenue yearly due to vape smuggling.

“The excise tax for nicotine salts is P47 per milligram. So with an estimated 500,000 units per month brought in illegally, with an average of five-milligram content at P47 per milligram, the country loses around P117.5 million per month or P1.41 billion annually,” Lumagui said.

Last month, the country’s biggest revenue generating agency issued new tax guidelines and set floor prices for vaporized nicotine and non-nicotine products and novel tobacco products.

The BIR said the minimum floor price of vape products shall be the total production cost, expense, or landed cost of the cheapest brand per tobacco product including the sum of excise tax and value-added tax (VAT).

For heated tobacco products, P140 will be the floor price for those with production cost of P95, excise tax of P30, and VAT of P15.

Furthermore, the BIR set a P131.04 floor price for 0.7 milliliter pod of nicotine. This will increase to P306.88 and P318.08 for 1.8 ml and 1.9 ml nicotine salts, respectively.

For a conventional freebase or classic nicotine, the floor price is set at P207.20 for a 15-ml bottle with production cost of P75, excise tax of P110, and a VAT of P22.20. A larger bottle of 30 ml classic nicotine will be priced at a minimum P352.80.