Presidential Decree No. 551 (PD 551) — Lowering the Cost to Consumers of Electricity by Reducing the Franchise Tax Payable by Electric Franchise Holders and the Tariff on Fuel Oils for the Generation of Electric Power by Public Utilities.
WHEREAS, the grantees of electric franchises are unable to
reduce their rates due to their high cost of operation;
WHEREAS, there is a need to provide electric current for
light, heat and power at a cost within the reach of consumers;
WHEREAS, assistance to the franchise holders by reducing
some of their tax and tariff obligations is imperative to attain the
above objectives;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution,
do hereby order and decree:
SECTION 1. Any provision of law or local ordinance to the
contrary notwithstanding, the franchise tax payable by all grantees of
franchises to generate, distribute and sell electric current for light,
heat and power shall be two (2%) of their gross receipts received from
the sale of electric current and from transactions incident to the
generation, distribution and sale of electric current.
Such franchise tax shall be payable to the Commissioner of Internal
Revenue or his duly authorized representative on or before the twentieth
day of the month following the end of each calendar quarter or month as
may be provided in the respective franchise or pertinent municipal
regulation and shall, any provision of the Local Tax Code or any other
law to the contrary notwithstanding, be in lieu of all taxes and
assessments of whatever nature imposed by any national or local
authority on earnings, receipts, income and privilege of generation,
distribution and sale of electric current.
SEC. 2. Tariff
Heading No. 27.09 of Sec. 104 of the Tariff and Customs Code, as
amended, is hereby further amended as follows:
Tariff
Heading
No.
Description of Articles
Rate of Duty
27.09
Petroleum oils and oils
obtained from bituminous minerals, crude.
(a)
for use as fuel oils for the
generation of electric power imported by electric utilities
Ad Val. 10%
(b)
Others
Ad Val. 20%
SEC. 3. Sec. 106 of the Tariff and Customs
Code, as amended, is further amended by inserting a new paragraph "b"
and relettering sub-paragraphs (b), (c), and (d), thereof to (c), (d),
and (e), respectively, the new paragraph (b) of the said Sec. 106 to
read as follows:
"b. On Petroleum Oils and Oils Obtained from Bituminous
Minerals, Crude Eventually Used for Generation of Electric Power. —
On petroleum oils and oils obtained from bituminous minerals, crude oils
imported by non-electric utilities sold, directly or indirectly, in the
same form or after processing, to electric utilities for the generation
of electric power, a refund or tax credit shall be allowed not
exceeding fifty per cent (50%) of the duty imposed by law upon such
oils, which shall be paid or credited under such rules and regulations
as may be prescribed by the Commissioner of Customs with the approval of
the Secretary of Finance."
SEC. 4. All the savings realized by electric franchise holders
from the reduction of the franchise tax under Section 1 and tariff
reductions and tax credits under Sections 2 and 3, shall be passed on to
the ultimate consumer.
The Secretary of Finance shall promulgate rules and regulations and
devise a reporting system to carry out the provisions of this Decree.
Violation of this section or the regulations promulgated by the
Secretary of Finance to implement it shall be penalized by a fine of not
more than P50,000.00 and imprisonment of not more than six (6) months.
In addition, the Secretary of Finance may order compulsory price or rate
reduction, which may be either prospective or retroactive in
application. If the offense is committed by juridical person, the
manager or person in charge of the management of the business or affairs
thereof shall be responsible therefor.
SEC. 5. This Decree shall take effect immediately.
Done in the City of Manila, this 11th day of September, 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
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
