Investigation into FLAVA E-cigarette for Possible Tax Evasion and Fraud

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Investigation into FLAVA E-cigarette for Possible Tax Evasion and Fraud
Filipino lawmakers are investigating e-cigarette brand FLAVA for possible tax evasion and fraud, following a raid on a warehouse that uncovered $25.5 million worth of illegal imports.

According to Manila Standard, Joey Sarte Salceda, chairman of the Philippines' House committee on ways and means, announced that his group will be conducting an investigation into the e-cigarette brand FLAVA, in order to uncover any potential cases of tax evasion and tax fraud.


On October 27, the organization conducted a raid on a warehouse storing illegally imported e-cigarettes featuring the brand's logo. They seized 1.4 million units of disposable e-cigarette products, valued at 1.43 billion pesos (approximately 25.5 million dollars). Sarseda estimates that out of this amount, around 728 million pesos (approximately 12.99 million dollars) could be unpaid consumption taxes.


Salceda added that the brand appears to have mistakenly labeled its product as a freebase alkaline e-cigarette instead of salt nicotine, as the latter is subject to higher taxation.


According to Republic Act No. 11467, the tax rate for salt nicotine e-cigarettes is P52 per milliliter, while the tax rate for freebase nicotine e-cigarettes is P60 per 10 milliliters.


We have received a report from independent testing that seemingly confirms one of FLAVA's products, Chillax, contains a high concentration of nicotine salts. If this is true, then they have only paid around one-tenth of the consumption tax that these products are supposed to pay," said Salseeda.


"FLAVA has been accused of not adhering to the stamp duty requirement for e-cigarette products," Salceda added.


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