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Tag: BIR

  • Philippines Cracking Down on Illegal Cigarettes, Criminals

    Philippines Cracking Down on Illegal Cigarettes, Criminals

    The Bureau of Internal Revenue (BIR) in the Philippines filed tax evasion charges totaling nearly ₱797 million ($14.3 million) against individuals involved in the large-scale illegal cigarette trade, intensifying its crackdown on illicit tobacco and vape operations. BIR Commissioner Romeo Lumagui Jr. announced that the charges stemmed from two recent raids.

    In Valenzuela City, authorities seized 600 master cases of untaxed cigarettes from a warehouse, with estimated tax liabilities of ₱200.7 million ($3.6 million). The lessee of the facility now faces criminal charges.

    A separate raid in San Rafael, Bulacan, uncovered an illegal cigarette factory allegedly operated by a Chinese national. The BIR recovered 7,884 master cases of illicit cigarettes and manufacturing equipment, worth ₱596.2 million ($10.7 million). The suspect also faces human trafficking charges after 155 workers were rescued from the facility.

    In a third similar bust, the National Bureau of Investigation (NBI) and the Department of Trade and Industry (DTI) arrested five individuals in Sta. Cruz, Manila, for allegedly selling unregistered vape products online. More than 25,000 vape units worth ₱8.16 million ($147,000) were confiscated in the joint operation, following test-buy and surveillance efforts. The suspects face charges for violating trade and consumer protection laws.

  • Philippines Planning Track-and-Trace System for Consumer Use

    Philippines Planning Track-and-Trace System for Consumer Use

    The Bureau of Internal Revenue (BIR) in the Philippines is set to roll out a digital track-and-trace system next year that will enable the public to verify the legitimacy of cigarette and vape products using QR codes, BIR Commissioner Romeo Lumagui Jr. said.

    The new system, being developed through a public-private partnership, will allow consumers to scan QR codes on product packaging using their mobile phones. The scanned information will link to a secure website providing detailed data on product origin, legitimacy, and tax compliance.

    Currently, the BIR uses its Internal Revenue Stamp Integrated System exclusively, which only government devices can verify. The planned QR tracker expands verification capabilities to the public, helping expose illicit cigarette and vape products and address loopholes such as fake export claims used to evade excise taxes.

    The rollout faced delays due to procurement and budget concerns, requiring approval from the Department of Economy, Planning and Development (formerly NEDA) and the Department of Finance. A feasibility study and revised terms of reference are currently under review.

  • Philippines Eyes Tobacco Tax Changes as Illicits Worsen

    Philippines Eyes Tobacco Tax Changes as Illicits Worsen

    During the Philippines’ Senate Committee on Ways and Means hearing yesterday (May 19), Bureau of Internal Revenue (BIR) assistant commissioner Jethro Sabariaga said cigarettes and heated-tobacco products should be taxed the same, but argued that vape products should be taxed much higher.

    “One vape product is not the same as the consumption of one pack of cigarettes,” Sabariaga said. “The government will be losing a lot as vape is consumed for a longer period of time.” 

    The BIR’s proposal comes as the Senate deliberated proposals to amend the excise tax on tobacco products amid worsening illicit trade. A counterpart measure in the House of Representatives seeks to lower the current tobacco excise tax rate, which increases 5% annually. Others proposed a unitary tax system for vapor products and ad valorem tax on vaping devices.

    During the same hearing, Philip Morris International-Fortune Tobacco Corp. maintained that the government needs to rationalize the tax rates amid ineffectiveness leading to lower government revenues. Instead of the 5% annual increase, PMFTC proposed an odd-even scheme for hiking the tobacco excise taxes: 0% every even-numbered year and 6% every odd-numbered year. PMFTC said such a scheme could boost revenues by up to P120 billion ($2.2 billion) every year.

  • Philippines Files Tax Evasion Case Against Vape Brands 

    Philippines Files Tax Evasion Case Against Vape Brands 

    The Philippines Bureau of Internal Revenue (BIR) filed tax evasion complaints against several vape brands due to alleged evasion of over P8.7 billion ($157 million) in taxes. The complaint was filed by BIR Commissioner Romero Lumagui Jr. before the Department of Justice on Tuesday (April 29), against vape firms carrying the brand names Flava, Denkat, and Flare.

    “It was confirmed that the excise [taxes] on these products were not paid. All of them are illicit,” Lumagui said. “This is what happens when you keep violating our tax laws. We are continuing our monitoring of the vape industry, so you can expect that this will not be the last time we file a case.”

    He also said that with the continued proliferation of illicit vape products in the market, the government’s total loss is probably billions more. The BIR said that it seized 560,000 units of vape products in 2024, representing P415 million ($7.5 million) in unpaid taxes. 

    In addition to tax evasion, the charges filed also include the illegal possession of vape products without the required excise tax under Section 263 of the National Internal Revenue Code, as well as failure to submit excise tax returns.