IMPOSING AN AD VALOREM TAX ON CERTAIN MANUFACTURED OILS AND OTHER FUELS, BUNKER FUEL OIL AND DIESEL FUEL OIL; REVISING THE 'RATES ON SPECIFIC TAX THEREON ABOLISHING THE OIL INDUSTRY SPECIAL FUND; AND FOR OTHER PURPOSES

• Number: Presidential Decree No. 1956
• Sections: 12

Preamble

WHEREAS, the current economic crisis amounts to a grave

emergency which affects the stability of the nation and requires immediate

action;

WHEREAS, it is also desirable to stabilize the prices of

petroleum products for a longer period despite exchange rate adjustments or

world market price changes;

WHEREAS, the issuance of this Decree is an essential and

necessary component of the national economic recovery program formulated to meet

and overcome the emergency;

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

Philippines, pursuant to the powers vested in me by the Constitution, do hereby

order and decree:

Section 1

SECTION 1. There is hereby imposed on certain manufactured

oils and other fuels, bunker oil and diesel fuel oil, an ad valorem tax, as

follows:

Kerosene, fourteen per centum;

Naptha, regular gasoline and all similar products of distillation,

twenty-five per centum;

Premium and aviation gasoline, twenty-five per centum;

Thinners and solvents, twenty-five per centum;

Liquefied petroleum gas, fourteen per centum;

Asphalt, fourteen per centum;

Aviation turbo jet fuel, twenty-five per centum;

Fuel oil, commercially known as bunker fuel oil and on all similar fuel

oils, having more or less the same generating power, seven per centum;

Fuel

oil, commercially known as diesel fuel oil, and on similar fuel oils, having

more or less the same generating capacity, twenty-two per centum.

Section 2

SEC. 2. The ad valorem tax shall be based on the wholesale

posted price net of specific and domestic ad valorem taxes of the oil product

concerned, as provided by the Board of Energy.

Section 3

SEC. 3. The ad valorem tax shall be paid by the

manufacturer, producer, owner, person having possession of importer, at the

same, time, in the same manner and subject to the same penalties, as the

Specific Tax, as prescribed in Presidential Decree No. 1158, as amended.

Section 4

SEC. 4. Proceeds realized from the ad valorem tax shall

accrue to the General Fund.

Section 5

SEC. 5. Section 153 of Presidential Decree No. 1158, as

amended, is hereby further amended to read as follows:

"SEC. 153. Specific Tax on manufactured oils and other

fuels.—On refined and manufactured mineral , oils and motor fuels, there shall

be collected the following taxes which shall attach to the articles hereunder

enumerated as soon as they are in existence as such:

“(a) Lubricating oil per liter of volume capacity, four pesos and fifty

centavos;

"(b) Naptha, regular gasoline and all other similar products of distillation,

per liter of volume capacity, one peso and twenty-nine centavos; Provided, That

on premium and aviation gasoline the tax shall be one peso and eighteen and

one-half centavos per liter of volume capacity;

"(c) On denatured alcohol to be used for motive power, per liter of volume

capacity, one centavo: Provided, That, unless otherwise provided for by special

taxes, if the denatured alcohol is mixed with gasoline, the specific tax on

which has

already been paid, only the alcohol content shall subject to the

tax herein prescribed, For the purposes of this subsection, the removal of

denatured alcohol of not less than one hundred eighty degress proof (ninety per

centum absolute alcohol) shall be deemed to have been removed

for motive

power, unless shown to the contrary;

"(d) Processed gas, per liter of volume capacity, five

centavos;

"(e) Thinners and solvents, per liter of volume capacity, one peso and twenty

centavos;

"(f) Liquefied petroleum gas, per kilogram, sixty-two and cue half centavos;

Provided, That liquefied petroleum gas used for motive power shall be, taxed at

a rate equivalent to the specific and ad valorem tax on diesel fuel oil;

"(g) Greases, waxes and petrolatum, per kilogram,

four pesos and fifty

centavos;

"(h) Aviation turbo jet fuel, per liter of volume capacity, one peso and

twenty centavos;

"(i) Fuel oil, commercially known as bunker fuel oil, and on all similar fuel

oils, having more or less the same generating power, twenty-five centavos per

liter of volume capacity."

Section 6

SEC. 6. The payments of Special Fund as provided in Section

17 of Republic Act 6173, as amended, shall be abolished; Provided, That

petroleum products in the possession of the oil companies which had been removed

from the refinery or from the bonded terminal but not yet sold, shall be subject

to the same rate of special fund impost prevailing- before the effectivity of

this Decree.

Section 7

SEC. 7. The special Fund created under Section 8 paragraph

(j), of Republic Act No, 6173, as amended, is hereby abolished. Outstanding

claims against the Special Fund shall be settled from the existing resources and

the balance, if any, shall be transferred to the General Fund.

Section 8

SEC. 8. There is hereby created a Special Account in the

General Fund to be designated as Oil Price Stabilization Fund for the purpose of

minimizing frequent price changes brought about by exchange rate adjustments

and/or an increase in world market prices of crude oil and imported Petroleum

products. The Fund may be sourced from any of the following:

Any increase in the tax collection from ad valorem tax or customs duty

imposed on petroleum products subject to tax under this Decree arising from

exchange rate adjustment, as may be determined by the Minister of Finance in

consultation with the Board of Energy;

An increase in the tax collection as a result of the lifting of tax

exemptions of government corporations under Presidential Decree No. 1931, as may

be determined by the Minister of Finance in consultation with the Board of

Energy;

Any additional tax to be imposed on petroleum products to augment the

resources of the Fund through an appropriate Order that may be issued by the

Board of Energy requiring payment by persons or companies engaged in the

business of importing, manufacturing and/or marketing petroleum products.

The Fund created herein shall be used to reimburse the oil companies for cost

increases on crude oil and imported petroleum products resulting from exchange

rate adjustment and/or increase in world market prices of crude oil. The Fund

shall be administered by the Ministry of Energy.

Section 9

SEC 9. The Minister of Finance shall promulgate the

necessary rules and regulations to implement this Decree.

Section 10

SEC. 10. Sections 155 and 156 of Presidential Decree No.

1158, as amended, and all laws, decrees, executive orders, rules and regulations

and other issuances, or parts thereof, which are inconsistent herewith, are

hereby repealed, amended or modified accordingly.

Section 11

SEC. 11. This Decree shall take effect on October 15,

1984.

Done in the City of Manila, this 10th day of October, in the year of Our

Lord, nineteen hundred and eighty-four.

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JUAN C. TUVERA

Presidential Executive Assistant