Philippines appeal WTO ruling on spirits

GENEVA—The Philippines filed an appeal Friday against a World Trade Organization ruling that the country’s high excise taxes on imported liquor were illegal.

“On 23 September 2011, the Philippines notified the Dispute Settlement Body of its decision to appeal the panel report … Philippines — Taxes on Distilled Spirits,” said the WTO in a statement.

The trade body ruled in favor of the European Union and the United States in August, finding the Philippines’ excise tax on imported alcohol unfair to American and European distillers.

The EU had alleged that in some cases levies on foreign spirits may be as much as 50 times higher than those on local liquor.

It said that the excise tax, designed to help domestic producers who use local cane and palm sugar, unfairly disadvantaged imported hard liquor.

Manila applies a lower tax rate on sugar and palm- based drinks produced within the country.

But the EU and the US argued that since Filipino products were being sold as whisky, gin, vodka, and tequila, they should be taxed at the same rate as the foreign products, even if they are made from different raw materials.

European experts estimated that exports of European liquor to the Philippines plunged more than 50 percent from 2004 to 2007 largely due to the excise tax.

The WTO panel in its ruling, said the Philippines should revise the tax to meet its obligations under the global trade regime.