Executives of Flava, Flare, and Denkat Brands Sued by Philippines' BIR for Alleged Tax Evasion, Involving $160 Million

Apr.29

On April 29, the Philippines' BIR sued executives of Flava, Flare, and Denkat brands for failing to register and evading $160 million in taxes. The BIR accused them of violating the National Internal Revenue Code and pledged to pursue illegal e-cigarette operators and promoters.

Overview of the incident:

Date and Location: April 29, 2025, Philippines.

Parties involved: Bureau of Internal Revenue (BIR) of the Philippines vs. executives of Flava, Flare, and Denkat brand companies.

Case background: The Bureau of Internal Revenue (BIR) has filed tax evasion lawsuits with the Department of Justice, accusing multiple e-cigarette brands of being unregistered and failing to pay consumption tax, involving a total amount of 8.7 billion pesos (approximately 160 million dollars).

Primary accusations: Tax evasion, failure to report sales tax, illegal possession of untaxed products.

Case Update: The BIR has filed charges and warned that they will continue to hold illegal practitioners and promoters accountable.

According to the Manila Bulletin on April 29th, the Bureau of Internal Revenue (BIR) has filed a tax evasion lawsuit with the Department of Justice (DOJ) against unregistered e-cigarette product importers and distributors, involving an amount of up to 8.7 billion pesos (approximately 1.6 billion US dollars).

The BIR Director Romeo D. Lumagui, who is responsible for filing lawsuits, stated that the BIR has already warned all parties intending to enter the e-cigarette industry that they must register with the BIR and pay the corresponding taxes.

The individuals sued in this case are corporate executives from brands such as Flava, Denkat, and Flare. According to the charges, the individuals have violated the 1997 National Internal Revenue Code (NIRC), specifically including:

·According to Article 263, illegal possession of e-cigarette products that have not paid consumption tax is prohibited;

·According to Article 254, tax evasion is prohibited;

·According to Article 255, failure to declare consumption tax is prohibited.

Lumaji pointed out that it is expected that more criminal cases regarding illegal e-cigarette transactions will be filed in the future. He emphasized that, regardless of the scale of operation, anyone selling illegal e-cigarette products will face imprisonment.

In addition, he warned that celebrities and internet influencers who collaborate with illegal e-cigarette operators will not be exempt. He reminded that endorsers and advertisers should only promote legal and tax-compliant products. He urged the public to actively report stores selling illegal e-cigarette products.

References:

[1] BIR files before DOJ P8.7-B tax evasion charges vs 'illicit importers, distributors' of vape products

Also Read:

[1] PMI Sanctioned by DTI for Violating Philippine Regulations: IQOS ILUMA Limited Edition Advertising Halted

[2] Tax Stamp System Drives Compliance: E-Cigarettes as Key Revenue Source

[3] DTI Reiterates SHFT Product Distribution Ban; Social Media Giveaways Face Penalty as Violations

[4] Philippine Government Intensifies Crackdown on Tobacco and E-cigarette Industries

[5] Crackdown on Illegal Sales of E-Cigarettes in Philippines Capital

Notice

1. This article is provided exclusively for professional research purposes related to industry, technology and policy. Any reference to brands or products is made solely for the purpose of objective description and does not constitute an endorsement, recommendation, or promotion of any brand or product.

2. The use of nicotine products, including but not limited to cigarettes, e-cigarettes, and heated tobacco products, is associated with significant health risks. Users are required to comply with all relevant laws and regulations in their respective jurisdictions.

3. This article is strictly restricted from being accessed or viewed by individuals under the legal age.

This article is either an original work by 2Firsts or a reproduction from third-party sources with the original source clearly indicated. The copyright and usage rights of this article belong to 2Firsts or the original source. Unauthorized reproduction, distribution, or any other unauthorized use of this article by any entity or individual is strictly prohibited. Violators will be held legally responsible. For copyright-related matters, please contact: info@2firsts.com

AI Assistance Disclaimer

This article may have utilized AI to enhance translation and editing efficiency. However, due to technical limitations, errors may occur. Readers are advised to refer to the sources provided for more accurate information.

This article should not be used as a basis for any investment decisions or advice, and 2Firsts assumes no direct or indirect liability for any errors in the content.