Phl to appeal WTO ruling on liquor tax

MANILA, Philippines - The Philippines will appeal a World Trade Organization (WTO) panel ruling which said that the government discriminates against foreign brands of alcoholic beverages by slapping unreasonably higher taxes.

Finance Secretary Cesar Purisima and Trade and Industry chief Gregory Domingo said the government would appeal the WTO ruling as this is what the local liquor industry wants.

At the same time, Purisima said that the Philippines, being a member of the WTO, would also be ready to respect the trade organization’s rules. “We will make an appeal but as a member of the WTO, we will have to respect the ruling,” Purisima told reporters yesterday.

According to a Reuters report, taxes levied by the Philippines on alcoholic drinks from the European Union and the United States are illegal under global trade rules.

The WTO said that the country’s tax system discriminate against brands such as Jack Daniel’s and Jim Beam as well as Spain’s Brandy de Jerez.

Furthermore, the trade body said the current system favors domestic producers.

However, Domingo said that the Philippines would appeal the ruling following an appeal from local manufacturers. “We will respect what the industry wants,” Domingo said.

However, there are no specific dates yet as to when the appeal would be filed, Domingo said when asked when a formal appeal would be made.

In an earlier statement, the Distilled Spirits Association of the Philippines (DSAP) said the government needs to appeal the findings of the WTO.

Members of DSAP include Destileria Limtuaco, San Miguel Corp., Ginebra San Miguel Inc., Tanduay Distillers Inc., Emperador Distillers, and Alcohol Distilleries-Absolute Chemicals Inc.

The group believes that the Philippine government does not discriminate against foreign brands but that these brands simply have different markets and are more expensive compared to the local brands because they are imported.