Thu, Dec 14, 2006 - Page 12 News List

Legislature pushes rice wine tax cut

By Jackie Lin  /  STAFF REPORTER

Amendments to Article 8 of the Tobacco and Wine Law (菸酒稅法) passed preliminary review in the legislature yesterday, which if passed will slash tax rates on rice wine and cooking wine, a move that could violate WTO regulations.

Lawmakers serving on the legislature's Finance Committee proposed the tax cut on rice wine, a popular seasoning in Chinese cooking but categorized as liquor, from the current NT$185 (US$5.70) per liter to NT$9.

The tax on cooking wine, also known as salted rice wine, will decrease from NT$22 per liter to NT$9 if the bill is successful. If the tax rate on rice wine is cut, the retail price for a 600ml bottle would drop from NT$180 to NT$75.

However, the measure might face retaliation from other WTO members, according to the Ministry of Finance.

"If Taiwan insists on slashing the tax rate on rice wine, taxes on other high-priced liquors, including brandy, whisky, vodka and Kao-liang liquor, must be cut as well to avoid WTO members' protests. But state coffers will lose tax revenues of at least NT$8.7 billion a year," said Hwang Ding-fang (黃定方), deputy director-general of the ministry's Taxation Agency.

The amendment will require inter-party negotiations before being placed for the second reading.

The ministry hopes lawmakers to reduce the tax rate on cooking wine and keep unchanged the tax on rice wine, Hwang said.

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