Wine Law

THE PROMOTION OF WINE AND TAXATION 455 Table 3 – With Fixed ISC 6 National Wine (S/ per 750 ml bottle) Imported Wine (S/ per 750 ml bottle) Prime cost 9.90 Tax Value (CIF + 6%) 9.90 Operating Expense + profit 7.00 ISC 2.50 S/ per litre 1.88 ISC 2.50 S/ per litre 1.88 Nacionalised value 11.78 Sales value 18.78 Operating Expense + profit 7.00 Sales value 18.78 On the one hand, Table 2’s conclusion is that national wine pays, plus tax, while, on the other, the conclusion of Table 3 is that with specific and fixed USC there is no difference in the payment of the tax. In May 2018, following the same mixed system, the tax, in addition to being increased, was divided into two sections, depending on the alcohol’s strength, for products up to 12º and more than 12º of alcoholic strength. Apparently based on the objective of “combating its negative externality, damage to health, pollution, among others” (Lozano & Villar, 2020), which agrees with the SUNAT’s concept of ISC (2018). This is another discriminatory measure because the wine would be in both categories, for it is a product that has the same characteristics of elaboration of raw material or processing, distinguishing where it should not be distinguished. Table 4 – ISC Taxes Applied by Different Grades 7 Product Specific ISC (S/ per litre) ISC at value (% sales value) With an alcoholic strength up to 12º (economy wines) 2.50 25 With an alcoholic strength of more than 12º (premium wines) 2.70 30 6 Retrieved from Bill No. 2501/2017-CR and adapted by this article’s author. From Table 3, it can be seen that a Specific System for determining the ISC, applicable exclusively, both for the importation of wines and the sale of wines produced in the country, eliminates the distortions referred to in Table 2; evidencing that, under a Specific System, the same ISC (1.88 S/) will be paid under the same scenarios (Source project No. 2501-2017). 7 Source: National Society of Industries; adapted by this article’s author.