Philippine Congress Investigates E-cigarette Brand for Tax Evasion

Nov.29.2023
Philippine Congress Investigates E-cigarette Brand for Tax Evasion
The Philippine House of Representatives has called for an investigation into Flava, an e-cigarette brand, for suspected tax evasion.

According to a report from Inquirer.net, the Philippine House of Representatives has demanded the Bureau of Internal Revenue (BIR) to verify the license and product specifications of an e-cigarette brand that is being investigated for allegedly evading billions of pesos in taxes. The committee has also issued another subpoena to e-cigarette product brand Flava and the local company DenKat Trading, believed to be involved in importing this brand.


Congressman Joey Sarte Salceda, who chairs the House Committee, has formally requested the Bureau of Internal Revenue (BIR) to send letters to the Food and Drug Administration (FDA) and the Department of Trade and Industry's Bureau of Product Standards (BPS) to verify Flava's product specifications. He also added that he has requested the BIR to examine the licenses posted on Flava's online store.


On November 28, the House Committee investigated the seizure of 1.4 million 10ml Flava disposable e-cigarettes at a warehouse in Valenzuela City on October 27. These e-cigarettes were found to lack the necessary documentation. According to Sarseda, it is suspected that Flava falsely labeled their products as traditional freebase e-cigarettes, which are taxed at a rate of 60 pesos per 10ml, rather than nicotine salts, which have a higher concentration and are taxed at a rate of 52 pesos per ml.


He pointed out that according to Article 263 of the National Internal Revenue Code, illicit transactions of variable products will face fines no less than ten times the value of the unpaid consumption tax. "The product in question, marketed as freebase nicotine, should be taxed at a rate of 60 pesos per 10 milliliters, but reports have shown that the product may have been misreported and should actually be taxed as nicotine salts, a more concentrated product with a tax rate of 52 pesos per milliliter," Salceda stated.


He added that Flava's marketing "implies that it is actually salt nicotine." According to the Vaporized Nicotine and Non-Nicotine Products Act (Republic Ordinance No. 11900), compared to freebase nicotine, salt nicotine has lower taxes because the latter is more concentrated and potent.


For a 10-milliliter equivalent, the main salt nicotine products in the market can provide 2,800 puffs. Flava markets claim to offer 6,000 to 10,000 puffs. Just based on this, one can imagine that the product is concentrated. This could potentially be a case of tax evasion amounting to 728 million pesos. If multiplied by 10, the final amount would reach 7.3 billion pesos (approximately 940 million yuan)," Salceda stated.


He also called on the Department of Finance and the BIR to come up with strategies to curb the illicit trade of e-cigarettes. "The purpose of this hearing is not just to prosecute one company, but to find ways to prevent the illegal trade of e-cigarettes, which would harm legitimate companies while allowing unregulated hazardous substances to exist in the market," said Salseda.


We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

FDA Revises Import Alert 98-07 Rules, Bringing May Enforcement Priorities Into Unauthorized ENDS Detentions
FDA Revises Import Alert 98-07 Rules, Bringing May Enforcement Priorities Into Unauthorized ENDS Detentions
The U.S. Food and Drug Administration has revised the rules under Import Alert 98-07 to incorporate its May 2026 enforcement-priority policy for certain electronic nicotine delivery systems marketed without premarket authorization. The alert continues to allow detention without physical examination, or DWPE, for ENDS lacking required marketing authorization, while directing field divisions to apply the May risk-based framework. When necessary, detention or refusal decisions must also undergo review by the FDA's Center for Tobacco Products. Products including PACHA and Vuse Pro have already emerged as industry examples of the May policy, although enforcement discretion does not constitute FDA marketing authorization.
News
Sep.28 by 2Firsts Perspectives
Yinghe-Controlled Vape Maker SKE Ordered to Post £569,039 Security as It Pursues Crystal Bar Design Infringement Case in UK
Yinghe-Controlled Vape Maker SKE Ordered to Post £569,039 Security as It Pursues Crystal Bar Design Infringement Case in UK
The UK High Court has ordered Chinese vape manufacturer Shenzhen SKE Technology to provide £569,039 ($776,000) in security for costs in its design infringement proceedings against Vapepen London and other defendants over its Crystal Bar vape product. The court did not accept the defendants’ main argument that recovering costs from a China-based company would face significant enforcement obstacles, but found that SKE had not sufficiently disclosed its own financial position. The order is procedural and does not determine the underlying infringement claims.
News
Aug.21
Product | DOJO Launches BLAST10K Fresh in UK With 0+10ml E-Liquid Structure, Retaining 2+8ml Pod Compatibility
Product | DOJO Launches BLAST10K Fresh in UK With 0+10ml E-Liquid Structure, Retaining 2+8ml Pod Compatibility
DOJO launched the BLAST10K Fresh in the UK on September 4, 2026, introducing its INSTA-JUICED™ technology and a new 0+10ml structure that keeps e-liquid separated from the coil before activation. The device features a 1000mAh rechargeable battery, COREX BLAST dual-mesh technology and SSS leak-resistant technology, with a manufacturer-rated capacity of up to 10,000 puffs. It also retains compatibility with existing 2+8ml pods across the BLAST ecosystem. The launch introduces eight new flavors, including Matcha Strawberry, which DOJO describes as an industry first.
Market
Sep.04
Special Report | Can Nicotine Be Replaced? 6-MN Is Already on the Market While Key Human Evidence Is Still Missing
Special Report | Can Nicotine Be Replaced? 6-MN Is Already on the Market While Key Human Evidence Is Still Missing
Nicotine analogues such as 6-methylnicotine are already appearing in e-cigarettes and oral pouches, even as key human evidence remains limited. A new Nixodine-S study adds nonclinical data showing differences from nicotine in cytotoxicity and receptor activity, while independent studies point to a more complex toxicological picture. With supply-chain activity growing and FDA seeking clearer authority over nicotine analogues, the industry now faces a larger question: what evidence is needed before these substances can credibly replace nicotine?
SCIENCE
Sep.23
EU Tobacco Tax Reform Targets November Push as Sweden Holds Nicotine-Pouch Minimum at €20 per Kilogram
EU Tobacco Tax Reform Targets November Push as Sweden Holds Nicotine-Pouch Minimum at €20 per Kilogram
The Irish presidency of the Council of the European Union is using bilateral talks to push the bloc’s Tobacco Taxation Directive toward a political agreement in November. According to Law360, citing an EU official, Sweden is unwilling to accept a minimum excise threshold above €20 per kilogram for nicotine pouches. Council negotiations have already lowered the European Commission’s original proposal, but a May 2026 presidency compromise still set the minimum at 10% of the tax-inclusive retail price or €30 per kilogram in 2028-29, with higher levels later.
Market
Sep.17 by 2Firsts Perspectives
U.S. Military Could Test Nicotine Pouches and Vapes for Smoking Cessation as Washington Examiner Cites ZYN and Potential $4 Billion Reduction in Related Defense Costs
U.S. Military Could Test Nicotine Pouches and Vapes for Smoking Cessation as Washington Examiner Cites ZYN and Potential $4 Billion Reduction in Related Defense Costs
The House-passed FY2027 National Defense Authorization Act includes a provision authorizing the defense secretary to conduct a one-year smoking-cessation pilot for active-duty service members. Section 707 lists counseling, nicotine gum and patches alongside what the bill calls "electric nicotine delivery systems," nicotine pouches and heat-not-burn products. A recent Washington Examiner op-ed cited ZYN as an example in arguing for the provision, but the legislation does not name any commercial brand or supplier. ZYN is made by PMI-owned Swedish Match USA, with specified products holding FDA marketing authorizations and modified risk orders.
Sep.20