BIR raids juice manufacturer over P800-M excise tax deficiency

MANILA – The Bureau of Internal Revenue (BIR) has conducted simultaneous raids on a major manufacturer of sweetened beverages and one of its distributors following the firm’s failure to pay excise taxes amounting to PHP800 million.

Led by BIR Commissioner of Internal Revenue Romeo D. Lumagui, Jr. and Atty. Jethro M. Sabariaga, Assistant Commissioner of the Bureau’s Large Taxpayers Service (LTS), BIR representatives raided the warehouse of Vermirich Foods Corporation (Vermirich), manufacturer of various juices, located in Cavite Light Industrial Park on Thursday, according to an agency news release late Thursday evening.

The raid was part of the bureau's ramped-up campaign against tax evasion and illicit trade.

BIR said that based on its records, Vermirich failed to file excise tax returns and pay the excise taxes due on the sweetened beverages they manufactured from 2018 to the present.

"This is in violation of Sections 130, 150-B, 254, and 263 of the National Internal Revenue Code (NIRC) of 1997, as amended, which pertains to the filing and payment of Excise Taxes,” the BIR said.

Vermirich also failed to secure the appropriate permit to operate as a manufacturer of sweetened beverage products subject to excise taxes, in violation of Section 154 of the same Code.

The BIR said the PHP800 million deficiency excise taxes incurred by the firm include interests, surcharges, fines, and the 12 percent value-added tax (VAT) on sweetened beverages, over the said period.

Simultaneously, BIR representatives conducted a raid at S&R Membership Shopping located at 32nd Street and 5th Avenue, Bonifacio Global City, Taguig.

According to information on file with the Bureau, S&R, a distributor of S&R Lemon Tea and S&R Raspberry Tea, both of which are powdered juice beverages manufactured by Vermirich, possessed these untaxed goods, which were then seized by the Bureau during the raid.

"BIR records also show that S&R had been duly advised by the Bureau in a letter dated July 6, 2021 to comply with the regulatory requirements," said BIR.

"As the distributor of Vermirich’s products, S&R failed to exercise due diligence in ascertaining whether the appropriate taxes had been paid by Vermirich on the sweetened beverages in question. Consequently, S&R can be held liable for violations of Section 4, Revenue Regulations No. 20-2018, and Sections 130, 150-B, and 263 of the NIRC," it added.

In a separate statement, the BIR said officials and employees of its Large Taxpayers Service also raided Supervalue, Inc. and Super Shopping Market, Inc., in SM City North Mall, Quezon City.

The agency said the raid was prompted by the discovery of numerous boxes of SM Bonus Apple Juice Drink and SM Bonus Orange Juice Drink in the warehouse of Vermirich Food Corporation that was raided by the BIR group in Cavite.

The BIR said Supervalue and Super Shopping Market, as distributors of SM Bonus Apple Juice Drink and SM Bonus Orange Juice Drink, were in possession of these untaxed goods, which were seized by the Bureau during the raid.

"Since both enterprises possessed the said goods, they failed to exercise due diligence in ascertaining whether the appropriate taxes had been paid by Vermirich on the sweetened beverages in question," it said.

BIR said it will continue to look into other manufacturers of sweetened beverages, to determine whether they have secured the appropriate permits to produce such goods and paid the correct excise taxes. (PNA)