Philippines accused of ‘discriminatory taxation’

THE Philippines will insist on taxing imported liquors based on a multi-tiered system when it appears this November before the World Trade Organization (WTO) to face complaining economic powerhouses United States (US) and European Union (EU) in a formal trial.

The US has now joined the EU in taking to task the country for discriminatory taxation from having two sets of tax rates for imported distilled liquors and locally-produced liquors. The country is a member of the WTO just like US and EU.

Director Ann Claire Cabochan of the trade department told the House ways and means panel that the US joined the WTO case last January and that the country is now going to trial before the global trade panel.

She also said the country will attend its first formal WTO hearing on November 17, 2010 in Geneva, Switzerland.

But before that, the country would submit its rebuttal to the position papers recently submitted by the US and EU against the country’s position.

“The Philippines is now in the process of preparing its rebuttal to be submitted October 14, 2010,” Cabochan said in yesterday’s hearing on proposed legislations on excise tax.

In an interview after the hearing, the lady trade official said the formal hearing was being conducted for the first time after “consultations” bogged down last year.

Cabochan said the WTO was not satisfied with the explanation of the country on its excise tax system, which led to the formal trial.

She said a Philippine delegation led by Ambassador Manuel Teehankee would be travelling to Geneva, Switzerland in November to appear before the WTO.

Cabochan said the country would veer away from the same arguments pursued by the losing countries of Japan, South Korean and Chile.

“We will take a different approach set forth by the three countries,” she said.

The previous losses of Japan, South Korean and Chile before the WTO have given rise to observation among trade, finance and industry players that “no complaining country loses in the WTO.”

Cabochan said the country is standing pat on its position on imported liquor tax and would not enter into a compromise.

“We will see. I think, so,” she said when asked about the chances of the country compared to the three losing WTO members.

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