MANILA - Local liquor makers and legislators doubt that the imposition of a single excise tax rate on sin products would help curb rampant smuggling in the Philippines as earlier claimed by the European Chamber of Commerce of the Philippines (ECCP).

"The proposal would not stop smuggling," said Distileria Limtuaco & Co. President Olivia Limpe-aw, referring to House Bill 6079, which seeks to slap a uniform tax rate on all alcohol and cigarette products.

Limpe-aw argued that a unitary tax rate would only favor member-countries of the European Commission since their export products would be enjoying the same tax rate imposed on local brands.

She added that the local liquor industry, which paid P4 billion in excise taxes last year, would suffer from any upward adjustment in taxes. "It would be grossly unfavorable to the local manufacturers."

For his part, Antique Rep. Exequiel Javier, pointed out that the said cut in smuggling activities resulting from the implementation of a uniform tax rate would be "little" since imported liquors only command 2% of the domestic market.

European countries have expressed strong support to the plan to impose a single tax rate on sin products, whether imported or locally produced.

ECCP spokesman Leslie Stokes, who is also an official of the British Chamber of Commerce, said the tax restructuring would not only address compliance with World Trade Organization (WTO) rules, but also prevent smuggling.

Last month, the 27-member European Union filed a complaint before the WTO over what it said was an unfair excise tax system in the Philippines that encouraged discrimination against imported spirits. Washington has joined the European Union in raising the issue at the WTO.