DIRECTING THE RATIONALIZATION OF DUTY AND TAX EXEMPTION PRIVILEGES GRANTED TO GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS AND ALL OTHER UNITS OF GOVERNMENT

• Number: Presidential Decree No. 1931
• Sections: 6

Preamble

WHEREAS, government-owned or controlled corporations as

well as entities performing quasi-governmental functions are still enjoying

exemptions from duties, taxes, fees, imposts and other charges despite the fact

that they are able to earn profits or pass on these duties and taxes to other

parties with whom they transact business;

WHEREAS, these duty and tax exemption privileges have

resulted in serious tax base erosion and distortions in the tax treatment of

similarly situated enterprises;

WHEREAS, such privileges make more difficult the

accomplishment of the overall program for economic development in general and

compete with private industries to a great extent, thus disturbing the equity

feature of the tax system;

WHEREAS, Presidential Decree No. 1177 has already expressly

repealed the grant of tax privileges to any government-owned or controlled

corporation and all other units of government; and

WHEREAS, there is need for government-owned or controlled

corporations and all other units of government enjoying tax privileges to share

in the requirements of development, fiscal or otherwise, by paying the duties,

taxes and other charges due from them.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Republic of the Philippines, by virtue of the powers vested in me by the

Constitution, do hereby order and decree:

Section 1

SECTION 1. The provisions of special or general law to the

contrary notwithstanding, all exemptions from the payment of duties, taxes,

fees, imposts and other charges heretofore granted in favor of government-owned

or controlled corporations including their subsidiaries, are hereby

withdraw.

SEC. The President of the Philippines and/or the Minister of

Finance, upon the recommendation of the Fiscal Incentives Review Board created

under Presidential Decree No. 776, is hereby empowered to restore, partially or

totally, the exemptions withdrawn by Section 1 above, or otherwise revise the

scope and coverage of any applicable tax and duty, taking into account, among

others, any or all of the following:

The effect on the relative price levels;

The relative contribution of the corporation to the revenue generation

effort;

The nature of the activity in which, the corporation is engaged in; or

In general, the greater national interest to be served.

Section 3

SEC. 3. The Ministry of Finance shall promulgate the

necessary rules and regulations to effectively implement the provisions of this

Decree.

Section 4

SEC. 4. The provisions of this Decree are hereby declared to

be separable, and in the event one or more of such provisions are declared

unconstitutional, the validity of the other provisions shall not be

affected.

Section 5

SEC. 5. The provisions of Presidential Decree No. 1177 as

well as all other laws, decrees, executive orders, administrative orders, rules,

regulations or parts thereof which are inconsistent with this

Decree are

hereby repealed, amended or modified accordingly.

Section 6

SEC. 6. This Decree shall take effect immediately after

promulgation.

Done in the City of Manila, this 11th day of June in the Year of Our Lord,

Nineteen Hundred and Eighty-Four.