BIR raid reveals some vape, e-cigarettes sold on malls are unregistered

Photo from the Bureau of Internal Revenue

MANILA, Philippines — A raid conducted by the Bureau of Internal Revenue (BIR) in various Metro Manila malls revealed that some vapor and electronic-cigarette products being sold are not registered with the tax-collecting agency.

The Task Force created by the Revenue Region No. 6-Manila explained on Wednesday that taxpayers identified as Gizmobile Ventures Inc. and Luxecity Manila Inc. were not registered as dealers of excisable items or products that should be subjected to excise tax.

Undercover investigators managed to buy products from the unregistered sellers, which eventually led to a raid last July 1.

“Discreet surveillance and test-buy operations undertaken by the Task Force on various dates identified two (2) taxpayers registered under the Region that are selling heated tobacco and vape products that are unregistered with the Bureau,” Revenue Region No. 6 Director Atty. Jethro Sabariaga said in a statement.

“A Certification obtained by the Task Force from the Bureau’s Excise Large Taxpayers Regulatory Division disclosed that these taxpayers – Gizmobile Ventures Inc. and Luxecity Manila Inc. – are not registered as dealers / traders of these items, nor are Relx and Snowplus++, the brands in their inventories registered as excisable products,” he added.

Photo from the Bureau of Internal Revenue

Sabariaga emphasized that Republic Act No. 11346, which amended the National Internal Revenue Code of 1997 provisions on tobacco products, has mandated certain additional taxes for heated tobacco, e-cigarettes, and vapor products — which was further amended by R.A. No. 11467 for higher taxes.

“In 2019, R.A. No. 11346 imposed excise taxes on heated tobacco and vape products for the first time, at the base rate of ₱10/ml. The law was later amended by RA 11467, which increased the tax rates to ₱37/ml., to help increase the government’s excise tax revenue collections,” he stressed.

“Currently, vape products are taxed at the rate of ₱42/ml. The sale and distribution of heated tobacco and vapor products without duly issued permits is a violation of Revenue Regulation No. 7-2021 and Revenue Memorandum Circular No. 24-2020, in relation to Republic Act Nos. 11346 and 11467,” he added.

“The Task Force shall continue monitoring the sales of these branches,” Sabariaga said.

“These are very challenging times, and the government needs all the help we can give through our taxes. As a former US Attorney General once said, ‘If you think compliance is expensive, try non-compliance!’ We have everything to gain by complying with our responsibilities as taxpayers,” he added.