WTO decision on Phl appeal out this week

MANILA, Philippines - The World Trade Organization (WTO) is set to release this week its decision on the appeal of the Philippines on the taxation of imported spirits like whiskey and brandy.

Speaking on the condition of anonymity, a source said the WTO will be releasing its decision on imported liquor case as early as late afternoon today or midnight Philippine time.

The Philippines has filed appeal against a WTO ruling that the country’s high excise taxes on imported liquor were illegal.

WTO judges in Geneva rejected the Philippines’ argument that imported liquor such as Jim Beam whiskey, Brandy de Jerez and Southern Comfort don’t compete with locally made distilled spirits and therefore different taxes based on the raw material used to make the liquor should be legal.

The Philippines applies a lower tax rate on sugar and palm-based drinks produced within the country. Levies on foreign spirits in some cases may be almost 50 times higher than those on domestic liquor, according to the EU. The Philippines should revise its tax to meet its WTO obligations, a panel of judges said.

The Philippine government team led by the Office of the Solicitor General (OSG) supported by the Department of Trade and Industry (DTI), Department of Finance (DOF), and other government agencies worked with the Distilled Spirits Association of the Philippines (DSAP) in the appeal process.

The Appellate Body process normally takes 90 days. The Appellate Body will come out with its own findings and conclusions on the appeal.

The source said once the ruling on the appeal comes out it becomes executor. In the event that the Philippines loses the appeal then the country no longer has any legal options and will have to obey.