RP to discuss liquor tax policy with US, EU in Geneva

Another round of negotiations on the Philippines’ disputed imported liquor taxes — this time requested by the US — has been slated in Geneva this month, a Trade official said on Friday. Delegations from the US and European Union (EU) — the original complainant — will meet with their Philippine counterparts on Feb. 23 to settle the latter’s allegedly unfair tax policy, Jose Antonio S. Buencamino, the Trade department’s lead official for World Trade Organization (WTO) matters, told reporters. The US and the EU have questioned the liquor tax policy of the Philippines, which levies a higher rate on imports, before the world trade body. The EU said Republic Act 9238, passed in 2004,raised excise taxes for locally produced spirits to 30 percent, while slapping a higher 50 percent levy on most types of imported spirits. This, they said, unfairly crippled sales of imported liquor, giving locally made counterparts undue advantage. The US, another major liquor exporter, echoed this argument, saying its products had scraped just a 0.06 percent share of the Philippine market because of the tax policy. If the negotiations yield a compromise, the WTO will no longer be called to step in and decide on the dispute. It has already set up a panel that will look into the dispute after the EU declared earlier talks a failure. If it comes to this, Buencamino reiterated that the Philippines would "defend the law." The local delegation earlier argued that varying tax rates should not matter since imports and Philippine-made liquor serve different markets and do not compete with each other. — Jessica Anne D. Hermosa, BusinessWorld