Government at odds over wine plans

Lawmakers sample a traditional Taiwanese soup known for its high rice-wine content in the legislature yesterday. The event was held to urge the government to pay more attention to the problem of bootleg rice wine in Taiwan. PHOTO: CHIANG YING-YING, TAIPEI TIMES

Economics officials yesterday reminded the Ministry of Fin-ance that despite their good intentions to resolve the nation's fake-rice-wine problem, moves to cut taxes on the local staple would be in violation of Taiwan's WTO commitments.

Before the tax could be reduced, the government would need to reopen negotiations with other WTO members including the US, foreign trade officials said yesterday.

"The proposal to lower rice wine prices by cutting taxes on distilled wine requires understanding from other wine importer countries, whose interests Taiwan has promised to respect in its WTO entry agreement," said Huang Chih-peng (黃志鵬), director general of the Board of Foreign Trade under the Ministry of Economic Affairs, at a press conference yesterday afternoon.

Huang made the comment in response to Vice Finance Minister Sam Wang's (王得山) proposal Thursday to cut rice wine taxes.

Wang told legislators that his ministry was considering plans to combat rampant sales of fake rice wine, which Chinese-language media reported may have killed as many as nine people.

The finance ministry plan proposes revising the law to allow a tax cut on rice wine that would reduce the retail price of the wine from NT$130 to less than NT$60 per bottle, Wang said.

The price cut is designed to push cheap look-alikes out of the market.

In accordance with WTO agreements, taxes on a 0.6-liter bottle of rice wine are expected to be raised from the current NT$90 to NT$111 next year, hiking the wine's price to more than NT$140 per bottle.

However, one day after Wang's plan made the headlines, Finance Minister Lee Yung-san (李庸三) yesterday avoided talking specifics on the plan, saying only that "further consideration will be required."

Huang encouraged the finance ministry to carefully evaluate the proposal's implications. These, he said, could include the need to renegotiate WTO agreements and the loss of tax and tariff revenues, since the same benefits must be extended to other foreign wine importers based on the WTO principle of reciprocity.

"It's not totally impossible. But the finance ministry has to be very cautious and many WTO members may not accept the new terms simply because of a problem at home with bogus wines," Huang said.

Vowing to crack down on fake rice-wine makers, the finance ministry yesterday came up with new measures to manage rice-wine production.

Lee said that he has ordered a full review on the content, quantity and quality of all the nation's private wine makers within one week.

The ministry also plans to set up a certification system to identify authorized products, thereby safeguarding public health.

He also urged local governments to crack down on illegal wine makers and immediately confiscate questionable products. He urged the public not to buy rice wine of questionable quality and to avoid any products offered at unreasonably low prices.