THE House Committee on Ways and Means chaired by Albay Rep. Joey Sarte Salceda on Tuesday concluded its inquiry into the reported inspection of a warehouse in Valenzuela City which led to the discovery of P1.428 billion worth of allegedly illegal electronic cigarettes (e-cigs) bearing the mark “Flava.”
The inquiry was conducted pursuant to House Resolution 1437 filed by Cagayan de Oro City Rep. Rufus Rodriguez, aimed at abating the proliferation of illicit trade through remedial legislation, as necessary.
Rep. Salceda noted that the e-cig brand found in the warehouse was registered with the Bureau of Internal Revenue (BIR), with FLAVA Corporation as the registered manufacturer. FLAVA Corporation COO Lilac Tayaban however declared that the Corporation did not import any products, but instead procured them from Denkat Trading Corp. owned by Dennis Rostata.
The panel found that FLAVA Corporation only paid P1.8 million in excise tax as of October 2023, instead of an estimated P84 million based on freebase nicotine’s excise tax of P60 per 10 milliliter (ml). Rep. Salceda remarked that the panel has yet to establish if the FLAVA products are actually freebase or salt nicotine.
Rep. Rodriguez noted that if these vape products are found to be salt nicotine, which is taxed at P52 per ml, the tax evaded would even reach to about P728 million.
The importer has not yet been identified, thus the P7 million customs duties of the discovered products remain unpaid. Bureau of Customs (BOC) Assistant Commission Atty. Vincent Philip Maronilla assured the Committee that the agency is already determining the real importer.
Rep. Rodriguez lamented that only a year after the enactment of the Vaporized Nicotine and Non-Nicotine Products Regulation Act, “we see unscrupulous businessmen, who are violating this law by not paying the proper customs duties and excise taxes.”
“This law is for the Universal Health Care System of this country,” he added. The panel is now set to draft the committee report on HR 1437.
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