AMENDING PRESIDENTIAL DECREE NO. 551

• Number: Presidential Decree No. 648
• Sections: 6

Preamble

WHEREAS, there is a need to equalize the cost of fuel among

those which are generating electric power for residential, commercial

and individual uses and those manufacturing "city gas";

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

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 and for the manufacture, distribution and sale of city

gas shall be two per cent (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 and of

manufactured city gas.

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 earning, receipt, income and privilege of generation,

distribution and sale of electric current and of manufactured city gas.

Section 2

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 and for the manufacture of "city gas"

Ad Val. 10%

b.

Others

Ad Val. 20%

Section 3

SEC. 3. Sec. 106 of the Tariff and Customs Code, as amended,

is further amended by inserting a new paragraph "b" and relettering

sub-paragraph (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 and for

the Manufacture of City Gas. — On petroleum oils and oils obtained

from bituminous materials, 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 and for the

manufacture of city gas, 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."

Section 4

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 rules and

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.

Section 5

SEC. 5. This Decree shall take effect immediately.

Done in the City of Manila, this 30th day of January, in the

year of Our Lord, nineteen hundred and seventy-five.

(Sgd.)

FERDINAND E. MARCOS

President of the Philippines

By the President:

(Sgd.)

ROBERTO V. REYES

Acting Executive Secretary