Philippine government to review tax on imported alcohol products

Posted By on December 23, 2011

MANILA, Dec 23 (Reuters) – The Philippines will review taxes on foreign alcohol products following a World Trade Organisation decision that the current system was discriminatory and the trade minister said the government will look at how to assist affected local distillers.

The Philippine taxes foreign alcoholic beverages at rates 10 to 40 times higher than brands made from locally-produced materials such as cane and palm sugar which the WTO found did not conform with global trade rules.

“(The WTO decision) would have an impact on the industry so we have to think of ways on how to mitigate its impact,” Trade Secretary Gregory Domingo said, adding the government would have to bring its tax laws into line with the global rules.

The United States has urged Manila to act swiftly to open its market to U.S. alcohol products like Jack Daniel’s and Jim Beam, but a local distillers group has expressed disappointment over the decision.

“We Filipinos know that these products do not really compete in any meaningful way and we tried to explain this to the panel and the appellate body,” the Distilled Spirits Association of the Philippines said in a statement.

“While we are disappointed with the decision, we understand that it is a final decision of the WTO.”