San Miguel will have to pay its back-taxes bill, according to press reports. The Philippine Daily Inquirer says that the Philippines Bureau of Internal Revenue (BIR) says the company has to pay PHP880m (US$15.7m) in back taxes, despite its protests.

The paper quotes the head of the BIR's Large Taxpayers Division Estelita Aguirre as saying: "They (San Miguel) are keeping their stand, and we are sticking to our decision. Whatever the outcome of this conflict, therefore, will depend on which of the two positions is more convincing."

The BIR is pursuing San Miguel for back taxes as a result of sales in 1999 of San Mig Light, which the BIR last year reclassified as a "variant" of San Miguel Pale Pilsen. According to Philippine tax codes, a variant of a brand is taxed based on the highest tax classification. In a note to the Philippine Stock Exchange last month, San Miguel said: "The company is of the view that the imposition of the higher tax is not in accord with law."

The paper says that Aguirre did not dispel the possibility of the two parties having to face each other in court.