UP to P7.2 billion can be collected from Flava to fund govt’s anti-illegal drugs campaign.
After the House Committee on Ways and Means found sufficient evidence that vape brand Flava violated the country’s vaping regulation and tax laws, it’s now time for the taxman to run after the alleged tax cheat, according to Surigao del Norte Second District Rep. Robert Ace Barbers.
If the Bureau of Internal Revenue (BIR) files and wins a tax-evasion case against Flava Corporation’s estimated P728 million in unpaid excise taxes, the government stands to gain over P7.2 billion — an amount which Barbers noted can cover two years of the government’s campaign against illegal drugs.
“As one of the principal authors of the landmark law intended to protect our youth, especially minors, from potential abuse of vaping devices, I am adamant on ensuring that this is followed by all industry players,” Barbers said, referring to Republic Act (RA) No. 11900.
The Vaporized Nicotine and Non-Nicotine Products Regulation Act prohibits the sale and marketing of vapes to minors — a business practice which the House Ways and Means panel, wherein Barbers also belongs, found Flava to have aggressively done on social media.
When RA 11900 was enacted into law in 2022, Barbers expressed confidence that more stringent vaping regulations will also prevent illegal substance abuse. Barbers, who chairs the House Committee on Dangerous Drugs, had noted that some illegal substances like cannabis oil and liquid shabu were being used as additives to vaping juices; hence, the Vape Law required all contraptions to be closed to avoid adding illegal drugs.
However, Barbers expressed dismay over Flava’s presence on e-commerce and other online platforms where it promotes and sells its vapes, in violation of RA 11900.
The House Ways and Means committee report on its investigation of Flava’s commercial practices found that, unfortunately, “several e-commerce platforms have been selling vapor products and electronic cigarettes without the necessary precautions necessary to verify the age of the purchaser as well as to apprise the public of the health implications of vape products and electronic cigarettes as required by law.”
“I urge the Department of Trade and Industry (DTI), as the vaping industry regulator, to heed the committee report’s recommendations: Revoke Flava Corporation’s business license and permit, as well as remove all of its vapes from the market,” Barbers said.
Aside from the public health risks posed by Flava, the committee report also flagged its apparent tax evasion after undervaluing imported excisable shipments worth P1.4 billion last year.
For Barbers, “it’s high time that the BIR hales Flava to court.”
Under the Tax Code, erring taxpayers owing excise taxes can be punished with a fine of not less than 10 times the amount of outstanding dues.
“With strong evidence against Flava, the BIR can generate for public coffers up to P7.2 billion. This potential windfall is more than double of the P3.4-billion budget of the Philippine Drug Enforcement Agency (PDEA) for 2024. We can duplicate our anti-illegal drugs campaign efforts if the government will collect what is due from tax evaders,” according to Barbers.
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