UK prods PNoy on liquor tax, cites WTO decision

The United Kingdom, the Philippines’ largest European source of investments, urged the Aquino administration Wednesday to “take immediate steps to achieve strict compliance" with global trade rules while the President’s allies in the House of Representatives chose to postpone action on simplifying liquor taxes. British Ambassador Stephen Lillie said in a statement the World Trade Organization (WTO) ruling, released last August 15, that Philippine liquor taxes violate the General Agreement on Tariffs and Trade “upholds a long-standing concern of the UK that current Philippine rules are discriminatory." The Aquino administration, through the Department of Trade and Industry (DTI) opted to appeal the WTO ruling. DTI Undersecretary for International Trade Adrian Cristobal Jr. said they are “thoroughly reviewing the WTO ruling and at the same time working closely with our relevant stakeholders to present a strong case in the appeal process." The Distilled Spirits Association of the Philippines said the WTO decision is not yet final and binding until the WTO Appellate Body hands down its ruling. House delays tax bills on liquor The DTI move, in turn, prompted the House of Representatives to set aside pending bills seeking to amend the laws on liquor taxes and expedite action on measures amending the current tax rates on tobacco and tobacco products. Representative Jocelyn Limkaichong, co-author of House Bill 2687, which seeks to restructure the excise tax on alcohol and tobacco products, said the House leadership has asked her to “split" the alcohol and tobacco components of HB 2687, so that the alcohol part can wait while the WTO appeal is pending. Limkaichong said she agreed to have the tobacco component of HB 2687 move forward together with two other bills of Batanes Rep. Henedina Abad and Iloilo Rep. Niel Tupas Jr. Batangas Rep. Hermilando Mandanas, ways and means committee chairman also has another sin tax measure, HB 4787. All these bills are pending at the House sub-committee on national internal revenue. Public hearings on the bills have yet to be called and set. There is a Senate bill on excise taxes on alcohol authored by Senator Panfilo Lacson but the Senate is unable to move forward with it because, according to the 1987 Constitution, it has to wait for the House to act first on any revenue measure. The House decided to get the bills on tobacco taxes moving after President Benigno Aquino III certified them as among the 13 new urgent bills his administration supports, Limkaichong said. The congresswoman from Negros Oriental said the Abad and Tupas bills also seek to reduce the number of tiers of sin tax rates, but those two bills will likely prevail because their higher rates will mean more revenues for the national government. Limkaichong said Mandanas’ HB 4787 simply changes the rates but retains the multiple levels of tax rates on alcohol and tobacco while HB 2687, which she co-authored with Rep. George Arnaiz and Rep. Pryde Henry Teves, adjusts the rates and cuts the number of tax tiers for distilled spirits to just two using alcohol content as basis. In the British Embassy statement issued Wednesday, Derek Page, Manila director of UK Trade and Investment said, “a more simple and non-discriminatory tax structure with a reasonable rate will not only present opportunities for international spirits, but also help grow tax revenue for government and reduce non-tax paid alcohol." — VS, GMA News