Levying A Surtax On Extraordinary Gains Realized By Oil Companies On Petroleum Products
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Levying A Surtax On Extraordinary Gains Realized By Oil Companies On Petroleum Products
Presidential Decree No. 1709
August 1, 1979
Case Overview and Summary
SUMMARY OF PRESIDENTIAL DECREE NO. 1709Surtax on Extraordinary Gains of Oil Companies
- Imposes a 20% surtax on extraordinary gains realized by oil companies from authorized price and specific tax increases on petroleum products. (Sec. 1)
- The surtax is not an allowable deduction for income tax purposes. (Sec. 1)
Computation of Extraordinary Gains
- Extraordinary gain is the difference between the approved wholesale posted prices before and after the authorized price increases, multiplied by the number of units of petroleum products existing on the day of price increase. (Sec. 2)
- Extraordinary gains include gains from price increases and upward revision of specific tax rates on petroleum products. (Sec. 2)
- The extraordinary gain is deemed realized during the quarter when the price increases occurred. (Sec. 2)
Time, Manner and Place of Payment
- The surtax must be paid within 30 days after the promulgation of this Decree. (Sec. 3)
- Oil companies can use their receivables from the Crude Equalization Fund as credits to offset the surtax liability. (Sec. 3)
- The surtax return must be filed with the Revenue District Office or Collection Agent or authorized Municipal Treasurer where the oil company's principal office and books of accounts are kept. (Sec. 3)
- Installment payments may be allowed under the rules and regulations. (Sec. 3)
Penalties
- Failure to pay the surtax and file the corresponding tax return, and any other violations of this Decree, are subject to surcharges, interests and penalties under the National Internal Revenue Code. (Sec. 4)
Investment Program for Balance of Gains
- Oil companies must prepare a program to invest the balance of extraordinary gains in their own projects to increase capacity and improve efficiency of their refining, bulk storage and distribution facilities in the country. (Sec. 5)
Rules and Regulations
- The Minister of Finance, upon recommendation of the Commissioner of Internal Revenue and in consultation with the Minister of Energy, shall promulgate rules and regulations to implement this Decree. (Sec. 6)
Repealing Clause
- All acts, decrees, executive and administrative orders, and other issuances inconsistent with this Decree are repealed or modified accordingly. (Sec. 7)
Effectivity and Applicability
- This Decree applies to extraordinary gains realized beginning August 1, 1979. (Sec. 8)
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Levying A Surtax On Extraordinary Gains Realized By Oil Companies On Petroleum Products
Presidential Decree No. 1709
•August 1, 1979
PRESIDENTIAL DECREE NO. 1709 August 1, 1979
LEVYING A SURTAX ON EXTRAORDINARY GAINS REALIZED BY OIL COMPANIES ON PETROLEUM PRODUCTS
WHEREAS, the grant of immediate price increase on the whole range of refined or blended petroleum products, oil companies derived extraordinary gains from the sale at higher prices of finished products processed from crude oil and other base stocks acquired at lower prices;
WHEREAS, a part of such extraordinary gains should be remitted to the Government for the benefit of a greater number of our people and the balance of such gains be devoted by the oil companies in projects designated to improve the capacity and efficiency of their facilities;
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 the following:
Sec. 1. Surtax on Extraordinary Gains; Rate of Surtax. In addition to the income tax imposed under the Title II of National Internal Revenue Code, there is hereby imposed a surtax of twenty (20%) per cent on...
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