PCCI backs restructuring of excise tax on liquor

MANILA, Philippines - The Philippine Chamber of Commerce and Industry (PCCI) supports the restructuring of excise taxes on imported distilled spirits to open up the Philippine market.

“I think we should unify it (tax system) to open up the market because they are already here...We are not objecting to it,” said PCCI vice chairman Donald Dee in an interview during a forum hosted by the All-Asian Centre for Enterprise Development (Ascend) PPCI on Friday.

The Department of Trade and Industry has announced that the Philippines will comply by March 8, 2013 to the ruling of the World Trade Organization (WTO) to remove “discriminatory” taxes imposed on imported distilled spirits.

The United States and the European Union, in separate cases filed several years ago at the WTO, said the Philippines violated global trade rules by imposing taxes on imported spirits at rates 10 to 40 times higher than those imposed on brands made in the Philippines from home-grown materials such as cane and palm sugar.

A WTO dispute settlement panel sided with the US and EU in August 2011 and the WTO appellate body upheld the decision late December 2011.

On Jan. 20, 2012, the WTO Dispute Settlement Body (DSB) upheld the decision after the Philippines appealed the case.

Trade Undersecretary Adrial Cristobal Jr. said that despite compliance to the ruling the Philippine government, through Congress, has the sovereign right to determine the tax system to be imposed on imported goods.

A bill is currently filed in the House of Representatives for the unification of the tax system on tobacco and alcoholic beverages.

The Philippines currently implements a multi-tiered tax system for tobacco and products and alcoholic beverages which makes it more difficult for foreign players to penetrate the Philippine market.