Manila, April 29, 2025 — The Philippine Bureau of Internal Revenue (BIR) has launched a major crackdown on tax evasion in the vape industry, filing criminal charges against three E-cigarette companies — Flava, Denkat, and Flare — for allegedly failing to pay excise taxes totaling a staggering ₱8.68 billion (approximately RMB 1.12 billion or USD 150 million).

According to official statements released by BIR Commissioner Romeo D. Lumagui Jr., the agency filed criminal complaints with the Department of Justice (DOJ) against the companies for violating multiple sections of the National Internal Revenue Code (NIRC), including:

• Section 263 – Unlawful possession of vapor products without excise tax stamps.
• Section 254 – Willful attempt to evade tax.
• Section 255 – Failure to file excise tax returns.

This legal action signals a significant shift in the Philippines’ approach to vapor and Fruit Flavored Vape regulation — with direct implications for industry players, foreign exporters, and retailers operating in the country.

A Wake-Up Call to the Vape Industry in Southeast Asia

The enforcement actions mark a new era of accountability in the Philippines’ vape sector, which has historically operated in a loosely regulated environment. The named companies are accused of selling E-cigarettes and vapor products without proper registration or excise compliance.

“This is the consequence of continuously violating our tax laws,” Commissioner Lumagui said in his official remarks.
“Today, we filed criminal charges against major illegal vape businesses that owe us ₱8.68 billion. We are warning all aspiring vapor business owners: register with the BIR and pay your taxes.”

The Brands Under Fire: Flava, Denkat, and Flare

These three brands, Flava, Denkat, and Flare, are widely recognized across the Philippines for selling Fruit Flavored Vapes and other E-cigarette products through both physical retail stores and online marketplaces. BIR alleges these companies operated outside of the tax framework by:

• Distributing vapor products without proper excise stamps.
• Failing to declare taxable revenues.
• Avoiding submission of mandated tax filings.

The brands are now facing full-blown criminal prosecution, which could result in imprisonment, business closure, and seizure of assets.

BIR’s Broader Mission: Compliance, Health, and Fair Competition

Commissioner Lumagui emphasized that the crackdown is not only about revenue recovery but also about protecting public health and creating a level playing field for law-abiding businesses.

“We will see more criminal cases against illegal vape sellers, regardless of their business size. Even celebrities or influencers who promote these products illegally will face jail time,” he warned.

The Commissioner further encouraged the public to report shops selling unregistered or illegal E-cigarettes, while urging advertisers to only promote brands that are tax-compliant.

Why the Philippines Is Getting Tough on Vape Products

The Philippines, like many Southeast Asian nations, has seen an explosive rise in vape and Fruit Flavored Vape usage, especially among youth. Health advocates have long urged the government to strengthen controls, citing the addictive nature of nicotine vapor and lack of transparency around product ingredients.

Recent studies in the country revealed:

• A 40% increase in underage vape usage between 2022 and 2024.
• More than 70% of young users prefer fruit-flavored vapor products like mango, lychee, and grape.
• A growing black market of unlicensed sellers on social media and e-commerce platforms.

These findings spurred lawmakers to back BIR’s intensified enforcement campaign as a means of curbing underage access and enforcing consumer protection laws.

Excise Taxation: What Vape Brands Must Know

According to the NIRC, all vape and E-cigarette products sold in the Philippines must be:

1. Properly registered with the Bureau of Internal Revenue.
2. Stamped with excise tax labels indicating that taxes have been paid.
3. Declared in monthly excise tax filings.

Failure to comply can result in:

• Fines starting at ₱500,000.
• Business license revocation.
• Criminal charges that may carry up to 10 years of imprisonment.

These regulations apply not only to local producers but also to foreign exporters shipping vapor products into the Philippine market. Non-compliance can result in customs seizure, blacklisting, or civil litigation.

Global Implications for Vape Exporters

For international vape businesses eyeing Southeast Asia, the Philippine government’s bold action serves as a regulatory bellwether. If one of the most vibrant and rapidly expanding E-cigarette markets is now tightening its grip, others in the region — such as Indonesia, Vietnam, and Thailand — may soon follow suit.

Exporters must:

• Understand local excise and import laws.
• Partner with compliant local distributors.
• Avoid selling unregistered or unapproved Fruit Flavored Vape products.

Failure to do so could result in brand damage, legal exposure, and loss of access to growing markets.

Market Impact: What’s Next for the Philippine Vape Industry?

With these high-profile prosecutions, the legal landscape for vape and E-cigarette businesses in the Philippines is changing fast. Several ripple effects are already being observed:

1. Retailers are removing non-compliant vapor products from their shelves.
2. Consumers are asking more questions about product legitimacy and tax stamps.
3. Online marketplaces are tightening their product listing policies.
4. Competitor brands that comply with the law are gaining visibility and trust.

This could spark consolidation in the vape market, with smaller or illicit players exiting under pressure, and a select group of compliant businesses expanding market share.

Warnings to Influencers and Affiliates

In a particularly strong statement, Commissioner Lumagui warned that influencers, celebrities, or social media accounts found endorsing or profiting from the sale of illegal vape products will also be held criminally liable.

“Just because you’re famous doesn’t mean you can sell or promote illegal E-cigarettes without consequences,” he said.

This echoes growing global concerns over unregulated vape advertising on platforms like TikTok, Facebook, and Instagram — where Fruit Flavored Vape promotions often target underage users without oversight.

A Call to Legal Compliance and Public Trust

Commissioner Lumagui concluded by calling on all stakeholders — manufacturers, importers, retailers, and advertisers — to commit to legal compliance, protect public health, and restore consumer trust in the vapor market.

“The era of illegal vape is over. We are building a responsible industry where health, law, and fair trade coexist.”

Conclusion: A Turning Point for Vape Regulation in Asia

The Philippines’ aggressive action against tax-dodging vape brands marks a watershed moment in the region’s approach to E-cigarette regulation. For legitimate manufacturers and exporters, it’s both a challenge and an opportunity: a call to higher standards, transparent operations, and healthier long-term growth.

As the vapor industry matures, governments are demanding not just innovation, but accountability. Brands that respond with integrity will survive — and thrive. Those that don’t may find themselves facing fines, lawsuits, and irreparable reputational harm.

• About
• Latest Posts

admin

Latest posts by admin (see all)

• Philippine Tax Authorities File Criminal Charges Against Three Vape Brands Over ₱8.68 Billion Tax Evasion – 04/29/2025
• Vuse to Exit Malaysia by Q3 2025 Amid New Vape Regulations: British American Tobacco Responds to Public Health Law – 04/29/2025
• ELF BAR Scores Trademark Victory in Germany: Crackdown on E-cigarette “Compatible Pods” Chaos – 04/28/2025