WHEREAS,
government-owned or controlled corporations as well as entities
performing quasi-governmental functions are still enjoying exemptions
from duties, taxes, fees, imposts and other charges despite the fact
that they are able to earn profits or pass on these duties and taxes to
other parties with whom they transact business;chanroblesvirtualawlibrary
WHEREAS, these duty and tax exemption privileges have resulted in
serious tax base erosion and distortions in the tax treatment of
similarly situated enterprises;chanroblesvirtualawlibrary
WHEREAS, such privileges make more difficult the accomplishment of the
overall program for economic development in general and compete with
private industries to a great extent, thus disturbing the equity
feature of the tax system;chanroblesvirtualawlibrary
WHEREAS, Presidential Decree No. 1177 has already expressly repealed
the grant of tax privileges to any government-owned or controlled
corporation and all other units of government; and
WHEREAS, there is need for government-owned or controlled corporations
and all other units of government enjoying tax privileges to share in
the requirements of development, fiscal or otherwise, by paying the
duties, taxes and other charges due from them. chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby order and decree:cralaw:red
Section 1. The provisions of special or general law
to the contrary notwithstanding, all exemptions from the payment of
duties, taxes, fees, imposts and other charges heretofore granted in
favor of government-owned or controlled corporations including their
subsidiaries, are hereby withdraw.
Section 2. The President of the Philippines and/or
the Minister of Finance, upon the recommendation of the Fiscal
Incentives Review Board created under Presidential Decree No. 776, is
hereby empowered to restore, partially or totally, the exemptions
withdrawn by Section 1 above, or otherwise revise the scope and
coverage of any applicable tax and duty, taking into account, among
others, any or all of the following:cralaw:red
1) The effect on the relative price levels;chanroblesvirtualawlibrary
2) The relative contribution of the corporation to
the revenue generation effort;chanroblesvirtualawlibrary
3) The nature of the activity in which the
corporation is engaged in; or
4) In general, the greater national interest to be
served.
Section 3. The Ministry of Finance shall promulgate
the necessary rules and regulations to effectively implement the
provisions of this Decree. chanroblesvirtualawlibrary
Section 4. The provisions of this Decree are hereby
declared to be separable, and in the event one or more of such
provisions are declared unconstitutional, the validity of the other
provisions shall not be affected.
Section 5. The provisions of Presidential Decree No.
1177 as well as all other laws, decrees, executive orders,
administrative orders, rules, regulations or parts thereof which are
inconsistent with this Decree are hereby repealed, amended or modified
accordingly.
Section 6. This Decree shall take effect immediately
after promulgation.
Done in the City of Manila,
this 11th day of June in the Year of Our Lord, Nineteen Hundred and
Eighty-Four.
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