Investigation Launched into Illegally Imported E-cigarette Warehouse Seizure and Tax Evasion

After a warehouse containing illegally imported e-cigarettes was raided on October 27, Albay Representative Joey Sarte Salceda, Chairman of the committee, announced that a thorough investigation will be conducted. The raid resulted in the seizure of e-cigarette products worth P1.43 billion, with an estimated P728 million in unpaid excise taxes. Additionally, around 1.4 million 10mL disposable vape pods were confiscated during the operation.

Misdeclaration and Tax Evasion

Further investigation revealed that the labels on the products fraudulently misdeclared them as freebase vape instead of salt nicotine, which carries a higher tax rate. As per Republic Act 11467, salt nicotine vape is taxed at P52 per milliliter, while freebase vape is taxed at P60 per 10 mL.

Salceda cited independent testing reports suggesting that one of the products, Chillax by FLAVA, contains substantial amounts of nicotine salts. This finding implies that the company has been paying only a fraction of the required excise taxes for these products.

Rep. Salceda’s Comments

Expressing concern over the potential tax evasion, Salceda stated, “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’s committee aims to gather further evidence and hold those responsible for the illegal importation and tax evasion accountable.

Conclusion

The recent seizure of illegally imported e-cigarettes and the subsequent revelation of tax evasion have prompted Albay Representative Joey Sarte Salceda to initiate an investigation. The misdeclaration of products, falsely labeling them as freebase vape instead of salt nicotine, has allowed companies to evade higher tax rates. The committee’s inquiry seeks to shed light on this issue and ensure that appropriate actions are taken.