The government said Aug. 9 it will continue to support a proposed amendment that would sharply reduce the tax imposed on rice wine, even though the U.S. and the EU have said they are concerned the amendment violates World Trade Organization regulations.
Consumers in Taiwan currently pay NT$50 (US$1.57) for a 600-milliliter bottle of “red label” rice wine, approximately NT$30 of which goes for taxes. The proposed amendment would reduce the cost to NT$25 per bottle, including an NT$5.4 sales tax.
A government official said the move would not be in violation of WTO rules, since rice wine is used in Taiwan mainly as a cooking wine, not a distilled liquor to be imbibed. Rice wine is thus entitled to be placed in a lower tax bracket than normal spirits, he said.
The official added that Taiwan will give equal treatment to other WTO members whose alcohol products are used for the same culinary purposes.
The government argues that the price reduction is necessary to protect public health. As a result of the high taxes on rice wine, many counterfeit products, some of which are unsafe, have proliferated in the market in recent years.
On July 26, the government submitted a report to the WTO, which members of the trade organization have 60 days to comment on.
Reports surfaced in recent days that if the proposed amendment is passed into law, the U.S. and the EU could file a claim against Taiwan with the WTO.
The government official said its representatives will continue to communicate with WTO members on the matter, to help them understand the bill would not threaten the sales of imported whisky and brandy.
After Taiwan joined the WTO in 2002, the price of rice wine soared immediately to NT$180 per bottle, due entirely to higher taxes. The price was subsequently reduced to NT$50 in June 2009. (HZW)
Write to Audrey Wang at audrey@mail.gio.gov.tw