AN ACT REVISING THE FORM OF TAXATION ON PETROLEUM PRODUCTS FROM AD VALOREM TO SPECIFIC

Case Overview and Summary

Summary of Republic Act No. 6965

Taxation on Petroleum Products
- Revises the form of taxation on petroleum products from ad valorem to specific tax rates.
- Amends Section 145 of the National Internal Revenue Code.

Specific Tax Rates:
• Lubricating oils and greases: ₱4.50 per liter of volume capacity (Section 1(1)).
  - Credit for specific taxes paid on purchased feedstock used in manufacturing.
  - Exemption for lubricating oils and greases produced from basestocks and additives on which specific tax has been paid.
• Processed gas: ₱0.05 per liter of volume capacity (Section 1(2)).
• Waxes and petroleum: ₱3.50 per kilogram (Section 1(3)).
• Denatured alcohol for motive power: ₱0.05 per liter of volume capacity (Section 1(4)).
  - If mixed with gasoline, only the alcohol content is subject to tax.
• Naphtha, regular gasoline, and similar products: ₱2.28 per liter of volume capacity (Section 1(5)).
• Premium gasoline: ₱2.52 per liter of volume capacity (Section 1(6)).
• Aviation turbo jet fuel: ₱2.38 per liter of volume capacity (Section 1(7)).
• Kerosene: ₱0.50 per liter of volume capacity (Section 1(8)).
• Diesel fuel oil and similar fuels: ₱0.45 per liter of volume capacity (Section 1(9)).
• Liquefied petroleum: ₱0.00 per liter, except when used for motive power (Section 1(10)).
• Asphalts: ₱0.56 per kilogram (Section 1(11)).
• Bunker fuel oil and similar fuels: ₱0.00 per liter of volume capacity (Section 1(12)).
• Naphtha used as raw material for petrochemical products: ₱0.00 per liter of volume capacity (Section 1(13)).
  - Domestic naphtha must be utilized before importing.
  - By-products from processing naphtha into petrochemical products are subject to applicable specific taxes.

Repealing Clause and Effectivity
• Repeals or modifies inconsistent laws, decrees, executive orders, issuances, rules, and regulations (Section 2).
• Takes effect upon approval (Section 3).