EU threatens retaliation over sin tax bill
GMA News | October 15, 2012
EU threatens retaliation over sin tax bill
House of Representatives Ifugao Rep. Teddy Baguilat warned that the free trade agreement (FTA) with the European Union will be jeopardized if Philippine government fails to take a second look at the sin tax bill.
Baguilat, who arrived from Brussels Sunday, said the EU objects to both the House of Representative’s and Senate’s versions of the sin tax bill as neither would pass World Trade Organization compliance because of unfair taxation.
Furthermore, if the bill is not amended, the EU will be forced to "retaliate" through the WTO.
Baguilat said EU Trade Commissioner Karel De Gucht offered a possible middle ground “in which the EU can be amenable to a graduated tax scheme allowing a higher tax for foreign liquor provided there is a clear rationale behind the tax regime and that foreign liquors will not be unfairly disadvantaged.”
Furthermore, according to Baguilat, Philippine embassy officials said that a lower tax rate for higher-priced liquor, mostly imported brands “might be acceptable to the EU.” — DVM, GMA News
