Taiwan Tobacco and Liquor Corp will begin offering a newly labeled rice wine at roughly half the price it currently sells for on Sept. 16, reflecting the product’s new positioning as a cooking wine rather than distilled spirit.
The company said yesterday that a 600ml bottle of the new Red Label rice wine will soon sell for NT$25, half of its current selling price of NT$50. A NT$2 bottle deposit will also be required.
The large price cut comes after the Legislative Yuan passed an amendment to the Tobacco and Liquor Tax Act (菸酒稅法) last month that dramatically reduced the excise tax on rice wine by classifying it as a cooking ingredient instead of a distilled spirit.
PHOTO: WANG MENG-LUN,TAIPEI TIMES
Based on the WTO’s principle of equal treatment, under which countries must offer the same treatment to domestic and imported goods, Taiwan currently imposes the same excise tax on all distilled spirits: NT$2.5 for every 1 percent of alcohol per liter of the beverage.
Thus, the excise tax on a 600ml bottle of rice wine with a 19.25 percent alcohol content has been NT$29.25.
As a cooking wine, however, the excise tax is NT$9 per liter, regardless of the alcohol content, meaning the tax on the 600ml bottle of Red Label rice wine will drop to NT$5.4.
Taiwan Tobacco and Liquor said the adjustment was justified because the Red Label rice wine will be mainly used for cooking and is not suitable for drinking.
The US and the EU, however, object to the change, contending it violates WTO rules because the WTO does not accept the idea of different treatment for alcoholic products based on their ingredients.
Foreign countries may challenge Taiwan’s decision through the world trade body’s dispute-settlement mechanism, but that has not stopped the government from going ahead with its tax-cutting initiative.
State-controlled Taiwan Tobacco and Liquor will even encourage consumers to take advantage of the new offer by allowing them to redeem any unopened bottle of rice wine purchased for NT$50 for two bottles of the Red Label rice wine once the price adjustment takes effect.
They will have to pay a bottle deposit of NT$4 to complete the exchange, the company said.
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