WHEREAS, in line with the policy of the government to
promote and hasten the discovery and development of the country's
indigenous petroleum resources, adequate incentives are granted to those
who are engaged or will engage in the search and exploration of oil in
this country;
WHEREAS, under Presidential Decree No. 87, contractors
entering into service contracts for petroleum exploration and
development with the government are allowed exemption from payment of
customs duty and compensating tax on imported machinery, equipment and
other materials used in their exploration activities;
WHEREAS, to further bolster domestic petroleum exploration,
it is desirable that similar duty/tax exemption should also be given to
holders of petroleum exploration concessions under Republic Act No. 387
otherwise known as the Petroleum Act of 1949;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution,
do hereby decree and order that petroleum exploration concessionaires
under Republic Act No. 387, also known as the Petroleum Act of 1949 be
exempted from the payment of customs duty and compensating tax on
importations of machinery and equipment, spare parts and materials
required for petroleum exploration operations subject to the conditions
that said machinery, equipment, spare parts and materials of comparable
price and quality are not manufactured domestically; are directly and
actually needed and will be used exclusively by the concessionaire in
its operations or in operations for it by a contractor or a
subcontractor; are covered by shipping documents in the name of the
concessionaire to whom the shipment will be delivered direct by the
customs authorities; and the prior approval of the Petroleum Board was
obtained by the concessionaire before the importation of such machinery,
equipment, spare parts and materials which approval shall not be
unreasonably withheld: Provided, however, That the concessionaire
or its contractor or subcontractor may not sell, transfer, export or
otherwise dispose of these machinery, equipment, spare parts and
materials without the prior approval of the Petroleum Board and payment
of duties and taxes due to the Government: Provided, further,
That should the concessionaire or its contractor or subcontractor sell,
transfer, export or dispose of these machinery, equipment, spare parts
or materials without prior consent of the Petroleum Board, it shall pay
twice the amount of the tax exemption granted: Provided, finally,
That the Petroleum Board shall allow and approve the sale, transfer, or
disposition of the said items without tax if made (1) to another
concessionaire or contractor under Presidential Decree No. 87; (2) for
reasons of technical obsolescence; or (3) for purposes of replacement to
improve and/or expand the operations of the contract;
All laws, or provisions of law, rules, orders or regulations
inconsistent herewith are hereby repealed or modified accordingly.
This Decree shall take effect immediately.
Done in the City of Manila this 6th day of August, in the year
of our Lord, nineteen hundred and seventy-four.
(Sgd.)
FERDINAND E. MARCOS
President of the Philippines
By the President:
(Sgd.)
ALEJANDRO MELCHOR
Executive Secretary