DTI shuts down vape company
THE Department of Trade and Industry (DTI) has ordered a vape company to shut down amid allegations of illegal marketing and tax evasion.
In an order issued on March 15, the DTI’s Fair Trade Enforcement Bureau (FTEB) refrained Flava Corp. from manufacturing, importing, selling, packaging and distributing imported vapes.
The order also covers the suspension of Lilac’s Vape Shop and Flava’s Chief Operating Officer (COO) Lilac Sison Tayaban.
The DTI said the suspension “aims not only to safeguard the consuming public but also to not impede the DTI’s administration and effective enforcement of the Vape Law and its implementing rules and regulations (IRR) during the pendency of this case.”
Flava was charged with violating Republic Act (RA) 11900, or the “Vaporized Nicotine and Non-Nicotine Products Regulation Act.”
The charges were filed before the DTI-FTEB on March 14. In turn, the DTI-FTEB issued the preliminary order to confiscate Flava products to prevent the disposition or tampering of evidence.
All of Flava’s commercial activities must immediately stop once the Manila-based business receives the preliminary order.
Some P728 million in foregone tax revenues was estimated from the alleged technical smuggling of P1.4billion worth of Flava devices last year, according to the House Ways and Means Committee.
The House panel had found that Flava had underdeclared its imported vapes from China and mislabeled its ingredient as freebase nicotine.
Freebase nicotine has a lower excise tax than nicotine salt, the imported vapes’ actual ingredient.
The House also said that Flava’s flavored vapes target minors most especially on social media, another violation of RA 11900.
Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr. said last week the agency seized 1,029 master boxes of Flava vapes with tax deficiencies totaling P75.7 million, from a warehouse in San Pablo City, Laguna.
“We have warned you as early as 2022. Our raids are successful. We won the criminal cases. You already have pending warrants of arrest. Register and pay your proper taxes, or suffer the consequences,” Lumagui said in a statement.
The BIR and the Laguna field unit of the Philippine National Police’s Criminal Investigation and Detection Group conducted the joint raid, which also led to the arrest of two individuals who were manning the warehouse.