WTO dispute settlement is littered with tax discrimination cases related to alcohol products. This article makes me think another might be on the way:
Taiwan consumers welcome the imminent return of rice wine that carries a much lower price tag but provides much better quality and safety.
They will soon enjoy the highly popular rice wine at only one-third of the present price after the Legislative Yuan completed yesterday the final reading of an amended tax law to slash the duty imposed on the product.
The steep cut in the price was made possible as legislators revised the rules of the Tobacco and Alcohol Act concerning duties on local and imported distilled liquor.
They decided to adopt a new formula under which the tax will be adjusted depending on the alcohol content of the product, setting the tariff at NT$2.5 per degree of alcohol per liter.
The lawmakers also adopted a resolution to set the price of the most popular red-label rice wine at no higher than NT$50 per 0.6-liter bottle, compared with the existing price of NT$180.
Rice wine has long been a staple ingredient in local cuisine and a major alcoholic drink for many low-income people.
Finance Minister Lee Su-der expects the new prices to take effect next month.
Since Taiwan's entry into the World Trade Organization (WTO) 2003, alcoholic products labeled “rice-wine” has been levied with an NT$185-per-liter tax, in line with the WTO's tax regulations on distilled spirits.
Chile - Alcohol also dealt with a tax based on alcohol content. A violation was found in that case, but I don't think this approach necessarily leads to a violation. It depends how the tax is structured.
