Wine Law

452 WINE LAW Notwithstanding, in 2013, a mixed (or alternative) system was introduced by Supreme Decree No. 092-2013-EF and modified by Supreme Decree No. 167- 2013-EF, in order to gradually reverse the impact of the negative externalities produced by the consumption of alcoholic beverages (COMEX), modifying the already mentioned Appendix IV, so that: (i) the system for affecting the ISC applicable to alcoholic beverages for human consumption is changed to a system that allows the three systems established in article 55 of the General Sales Tax and Selective Consumption Tax Law, to be applied alternately (At Value, Specific and At Value according to Retail Price); (ii) the ISC applicable to these beverages is increased; (iii) the ISC is organised according to the degree of alcohol they contain; and (iv) some avoidance incentives are eliminated. Likewise, the ISC to be paid will be the highest value that results from comparing the result obtained from applying the rate or fixed amount, as appropriate. The rule also indicates that if the result obtained from applying the rate or fixed amount, referred to in the previous procedure, turns out to be the same, the ISC payable will be that same result. In this regard, various comments were made in those years, taking into account the case of wine and other spirits and its current consequences, because if the ISC seeks to tax the negative externality produced by consumption, as it is conceptualised by Peru’s tax governing body: “The ISC is an indirect tax that, unlike the IGV [General Sales Tax], only taxes certain goods (it is a specific tax); one of its purposes is to discourage the consumption of products that generate negative externalities in the individual, social and environmental order, such as: alcoholic beverages, cigarettes and fuels.” (SUNAT, 2018). In other words, the ISC has extra-fiscal purposes such as being an instrument of allocative actions in the event of undesirable needs, taxing the consumption of harmful goods, among others (Comisión de Defensa del Consumidor y Organismos Reguladores de los Servicios Públicos, 2016). In the case of wine, a specific tax would suffice; the opposite – its alternative application, that is – would mean the concurrence of the ad valorem system, which taxes alcoholic beverages by their price and not by the externality they generate. Therefore, it would be distorting the organising social purpose that prioritises the collection at the cost of sacrificing the wine industry’s clearance, putting behind the back wine promotion, which is a generator of regional economies. In this regard, although “It is an obligation of the State to ensure, within the