The House Ways and Means Committee will investigate the e-cigarette label FLAVA for possible tax evasion and tax fraud.
Albay Rep. Joey Sarte Salceda, chair of the committee, said his panel will conduct the probe after a warehouse with illegally imported e-cigarettes bearing the label was raided on Oct. 27.
The raid yielded products valued at P1.43 billion. From the said amount, Salceda estimates that P728 million can be in unpaid excise taxes.
Some 1.4 million pieces of 10mL disposable vape pods were confiscated during the raid.
Salceda added it appears that the label has also been misdeclaring its products as freebase vape rather than salt nicotine, as the latter is taxed at a higher rate.
Under Republic Act 11467, salt nicotine vape is taxed at P52 per milliliter, while freebase is taxed at P60 per 10 mL.
“We have received reports of independent testing which appears to confirm that one of FLAVA’s products, Chillax, contains high concentrations of nicotine salts. If that is the case, then they have been paying just about one-tenth of what they should be paying in excise taxes for those products,” Salceda said.
He said his committee will also be looking at their BIR registrations. “Vape products have tax stamp requirements, and there are allegations that FLAVA has in fact not been compliant.”
“80 percent of revenues from vape sin taxes are spent towards universal health care and government hospitals. So, the health impacts of smoking vapes aside, tax evasion in this product is stealing from our hospitals and our sick.”
Salceda, who was already chair of the House tax committee when RA
11467 or the Vape Tax Law was passed, is also a principal author of
the measure.