BIR wins ₱796 Million Tax Evasion Case before the DOJ against Large-Scale Illicit Cigarette Operations in Valenzuela City and San Rafael, Bulacan; Case is now pending before the CTA

 

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The Bureau of Internal Revenue (BIR), headed by Commissioner Romeo D. Lumagui, Jr., reports that criminal cases were filed before the Court of Tax Appeals (CTA) last July 1, 2025, in connection with two large-scale illicit cigarette operations that resulted in estimated tax deficiencies totaling ₱796.95 million. Elevation of the case to the CTA was a result of the Department of Justice (DOJ) ruling in favor of BIR's complaint.

The BIR charged the lessee of a warehouse located in Brgy. Ugong, Valenzuela City, for the unlawful possession of excisable goods. Specifically, 600 master cases of untaxed cigarettes were discovered in the facility in early November during the largest operation of the BIR against illicit cigarettes for 2024. The BIR is pursuing the case under Section 263 of the National Internal Revenue Code of 1997, as amended, which penalizes the possession or removal of articles subject to excise tax without payment. The total tax liability involved in this case is estimated at ₱200,718,600.00.

Another case which involves a significantly larger tax deficiency amounting to ₱596,233,545.50, was likewise filed before the CTA against a Chinese national believed to be operating an illegal cigarette manufacturing facility in Brgy. Moranquillo, San Rafael, Bulacan. The BIR charged said individual for multiple violations of the Tax Code, including Section 260 (Unlawful possession of cigarette tipping paper or filter tips), Section 263 (Unlawful possession of excisable articles without tax payment), and Section 265-B (Illegal possession of manufacturing equipment for cigarette production). These charges are based on the 7,844 master cases of illicit cigarettes and manufacturing paraphernalia found in the facility during the same joint simultaneous raid operation. A separate human trafficking case was also filed by the Criminal Investigation and Detection Group (CIDG) after 155 trafficked workers were rescued from the premises.

“155 Filipinos were victims of human trafficking perpetrated by illicit cigarette businessmen. Not only were they forced to work for an illegal enterprise, they were also working under unsanitary and unhygienic conditions. We will raid warehouses, seize illicit products and equipment, file criminal charges, and ensure arrests. No one, even the biggest operators, escapes the law,” Commissioner Lumagui reiterated.

The BIR continues to encourage the public to support the agency’s efforts by reporting activities related to the sale or manufacture of untaxed cigarettes. Ensuring tax compliance is a shared responsibility, vital to the nation's development and fairness in business.

"We assure the public that all BIR operations against illicit trade of cigarettes and vape will result into the filing of criminal cases against those involved. We will raid your warehouses. We will file criminal cases. You will be arrested," Commissioner Lumagui stated.

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