The Ministry of Finance plans to narrow the discrepancy in taxes on rice wine for cooking and do-it-yourself rice-wine kits in an effort to encourage consumption of cooking wine.
Under the ministry's proposal, the tax on rice wine for cooking will be lowered from NT$22 to NT$9 per liter, while the alcohol tax will be increased from NT$11 to NT$15 per liter.
But the tax scheme, to be reviewed by the legislature next session, is not expected to change pricing by the Taiwan Tobacco & Liquor Corp (TTL,
"To reflect our costs, there's not much room for a price cut in our products, despite the proposed tax cut plan," TTL chairman Morgan Hwang (
Hwang said that prices for the company's salted rice-wine for cooking will remain unchanged despite the lower tax rate.
Hwang said the ministry should eliminate the tax altogether.
"No taxes should be levied on cooking materials," he argued.
A ministry official surnamed Wu, however, disagreed with Hwang, saying the tax cut should be able to bring down the price for cooking wine by about NT$8 per bottle.
If the tax scheme is passed in the legislature, the tax on the company's NT$48 cooking rice wine will fall from NT$13.2 to NT$5.4 per 0.6-liter bottle, the official said.
"Bringing down the price of the cooking wine is the major reason behind the legal revision," Wu said. "If Taiwan Tobacco refuses to lower the price, the ministry may reconsider the tax-cut proposal."
To skirt WTO regulations, many rice-wine producers sold 80-proof do-it-yourself rice-wine kits last December to compete with Taiwan Tobacco's red-label rice wine, which sold for NT$121 per 0.6-liter bottle. Of that price NT$90 is in tax, or NT$150 per liter.
As per WTO regulations, the rice-wine tax was raised to NT$180 per liter this month.
With a tax of only NT$11 per liter, most do-it-yourself kits undercut prices at Taiwan Tobacco. Prices range from Kinka Rice Spirits' (
"The ministry is hoping to cut down bootleg production by raising its costs," Wu said.
The alcohol tax increase, however, is too small to have a significant impact on the production of fake wine or alter the price of rice-wine kits.
Taisugar yesterday refused to comment on the ministry's new tax scheme, saying only that the company will consider the possibility of a price hike once the rate is finalized in the legislature.
To compete with Kinka, Taisugar chairman Wu Nai-jen (
To deal with the fake rice-wine problem -- which has killed more than 10 people in Taiwan -- the ministry also plans to tighten penalties.
According to Anita Chou (周秀玲), an official at the ministry's treasury department, fake wine makers will be given a jail term of one to three years and a fine of between NT$600,000 to NT$3 million.
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