used for the process of bottling water.
The current law exempts distilled bottled water from import tax, the measure introduced by Del. Jonathan Isechal proposes a 25 percent ad valorem on bottled water.
”Drinking water is an important resource and lucrative industry both in Palau and internationally and by increasing the import tax on all bottled water, including distilled water, the republic will increase the tax base as well as create an incentive for consumers to purchase water for Palauan companies,” the bill said.
The House Committee on Ways and Means said the purpose of the bill is to create an incentive for consumers to purchase bottled distilled water from Palau companies to allow Palauan distilled water companies to compete in international and domestic markets and to increase local revenues by eliminating an exemption to the import for bottled distilled water.
Palauan companies meanwhile allows Palauan-owned companies whose primary business is to bottle water to import products used to bottle water without paying import tax on the items.
The bill will increase the cost of imported water and will give local companies tax break on the purchase of products necessary for bottling.
The measure will decrease the start-up cost for new water bottling companies and will give current water-bottling companies a financial edge over foreign competitors.
