Exempting Coconut Oil From the Coconut Levy and Sales Tax as Well as From the Special Fund Impost to Diesel

EXECUTIVE ORDER NO. 827 September 1, 1982

EXEMPTING COCONUT OIL FROM THE COCONUT LEVY AND SALES TAX AS WELL AS FROM THE SPECIAL FUND IMPOST TO DIESEL

WHEREAS, it is necessary at this time of imbalance between our supply and demand for middle distillate fuels to develop indigenous motor fuel substitutes;

WHEREAS, it has been found and successfully demonstrated that the use of coconut oil as diesel fuel extender is technically and economically feasible;

WHEREAS, the use of this indigenous and renewable source as diesel fuel blending stock will not only alleviate the fuel imbalance but also help absorb the country's coconut oil surplus and thus buoy up the coconut industry and consequently protect the livelihood of our coconut farmers;

WHEREAS, the Cabinet Executive Committee has already approved for implementation a Coco-diesel program which will use a blend of a maximum 5% coconut oil and 95% diesel fuel nationwide distribution and sale for automotive purposes;

WHEREAS, for the program to succeed, it is necessary to secure a continuous and stable source of supply of...

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Summary of Executive Order No. 827

Exemption of Coconut Oil from Taxes and Levies
- Coconut oil used as engine fuel, either in pure form or as a blending component for diesel fuel, is exempted from the following:
  • Coconut levy (Section 1)
  • Sales tax (Section 1)
  • Special fund impost normally applied to diesel fuel (Section 1)
  • Specific tax normally applied to diesel fuel (Section 1)

Implementation and Regulation
- The Ministry of Energy, in consultation with the Ministers of Finance and NEDA, and upon recommendation of the Commissioner of Internal Revenue, shall promulgate rules and regulations to implement the Order. (Section 2)
- The Philippine Coconut Authority and the Board of Energy shall, in consultation with the Ministers of Energy and NEDA, promulgate necessary rules and regulations to implement the Order. (Section 3)

Rationale and Background
- There is an imbalance between supply and demand for middle distillate fuels, necessitating the development of indigenous motor fuel substitutes. (Preamble)
- The use of coconut oil as a diesel fuel extender has been found and demonstrated to be technically and economically feasible. (Preamble)
- Using coconut oil as a diesel fuel blending stock will alleviate the fuel imbalance, absorb the country's coconut oil surplus, and protect the livelihood of coconut farmers. (Preamble)
- The Cabinet Executive Committee has approved a Coco-diesel program that will use a blend of up to 5% coconut oil and 95% diesel fuel for nationwide distribution and sale for automotive purposes. (Preamble)
- To make the use of coconut oil as a diesel fuel extender economically viable at current diesel and coconut oil prices, it is necessary to exempt coconut oil from the mentioned taxes and levies. (Preamble)

Effective Date
- The Order takes effect immediately. (Section 4)