EXECUTIVE ORDER NO. 959 August 1, 1984
REVISING THE PERCENTAGE TAX RATE ON LOCALLY PRODUCED CRUDE OIL
WHEREAS, under Presidential Decree 1615 which took effect on March 13, 1979, a percentage tax of twenty-two per centum (22%) was levied on locally produced crude oil in order that its price can be placed at par with the price of imported crude which, in addition to the inward ocean freight and other incidental costs importation, is subject to the payment of twenty-two per centum (22%) customs duty;
WHEREAS, without this percentage tax, those oil companies which have access to the market for locally produced crude oil would have undue advantage over other oil companies wholly dependent on imported crude oil;
WHEREAS, with the recent realignment of ad valorem duty on importations, it becomes imperative to adjust the rate of percentage tax on locally produced crude oil to a level consistent with the prevailing statutory rate of thirty-three per centum (33%) customs duty on imported crude oil.
NOW, THEREFORE, I, FERDINAND, E. MARCOS, President of...
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Executive Orders
Revising the Percentage Tax Rate on Locally Produced Crude Oil
Executive Order No. 959
Revising the Percentage Tax Rate on Locally Produced Crude Oil
- Background and Rationale:
• Previously, a 22% tax was levied on locally produced crude oil to match the price of imported crude oil, which was subject to a 22% customs duty. (Whereas clauses)
• Without this tax, oil companies with access to locally produced crude oil would have an undue advantage over those relying on imported crude oil. (Whereas clauses)
• Due to the recent realignment of ad valorem duty on imports, it became necessary to adjust the tax rate on locally produced crude oil to match the prevailing 33% customs duty on imported crude oil. (Whereas clauses)
- Provisions:
• Section 1 amends Section 199(b) of the National Internal Revenue Code of 1977 to levy a 33% tax on the first taxable sale, barter, exchange, or similar transaction intended to transfer ownership or title to indigenous petroleum. (Section 1)
• The tax is to be paid by the buyer or purchaser within 15 days from the date of actual or constructive delivery. (Section 1)
• The "first taxable sale, barter, exchange or similar transaction" means the transfer of indigenous petroleum in its original state to a first taxable transferee. (Section 1)
• The fair international market price shall be determined in accordance with regulations promulgated by the Minister of Finance upon the recommendation of the Commissioner of Internal Revenue in consultation with an appropriate government agency. (Section 1)
• "Indigenous petroleum" includes locally extracted mineral oil, hydrocarbon gas, bitumen, crude asphalt, mineral gas, and all other similar or naturally associated substances, except coal, peat, bituminous shale, and/or stratified mineral deposits. (Section 1)
• Section 12 and relevant provisions of Chapter II of Title IV of the National Internal Revenue Code shall apply in enforcing this subsection. (Section 1)
- Repealing Clause and Effectivity:
• Any laws, decrees, or orders that conflict with this Executive Order are repealed or modified accordingly. (Section 2)
• This Executive Order takes effect on August 1, 1984. (Section 3)
- Background and Rationale:
• Previously, a 22% tax was levied on locally produced crude oil to match the price of imported crude oil, which was subject to a 22% customs duty. (Whereas clauses)
• Without this tax, oil companies with access to locally produced crude oil would have an undue advantage over those relying on imported crude oil. (Whereas clauses)
• Due to the recent realignment of ad valorem duty on imports, it became necessary to adjust the tax rate on locally produced crude oil to match the prevailing 33% customs duty on imported crude oil. (Whereas clauses)
- Provisions:
• Section 1 amends Section 199(b) of the National Internal Revenue Code of 1977 to levy a 33% tax on the first taxable sale, barter, exchange, or similar transaction intended to transfer ownership or title to indigenous petroleum. (Section 1)
• The tax is to be paid by the buyer or purchaser within 15 days from the date of actual or constructive delivery. (Section 1)
• The "first taxable sale, barter, exchange or similar transaction" means the transfer of indigenous petroleum in its original state to a first taxable transferee. (Section 1)
• The fair international market price shall be determined in accordance with regulations promulgated by the Minister of Finance upon the recommendation of the Commissioner of Internal Revenue in consultation with an appropriate government agency. (Section 1)
• "Indigenous petroleum" includes locally extracted mineral oil, hydrocarbon gas, bitumen, crude asphalt, mineral gas, and all other similar or naturally associated substances, except coal, peat, bituminous shale, and/or stratified mineral deposits. (Section 1)
• Section 12 and relevant provisions of Chapter II of Title IV of the National Internal Revenue Code shall apply in enforcing this subsection. (Section 1)
- Repealing Clause and Effectivity:
• Any laws, decrees, or orders that conflict with this Executive Order are repealed or modified accordingly. (Section 2)
• This Executive Order takes effect on August 1, 1984. (Section 3)