Under the WTO's 'National Treatment' principle, a member country is legally permitted to impose higher internal sales taxes on imported foreign goods compared to identical domestically produced goods to protect local industries.

Answer: False

The National Treatment principle (Article III of GATT) strictly prohibits such discrimination. Once foreign goods have cleared customs and entered the domestic market, they must be treated exactly the same as 'like' domestic products regarding internal taxes, regulations, and standards. Imposing a higher internal sales tax on imports to shield local producers is a direct violation of WTO rules and can invite retaliatory trade sanctions.