WHEREAS,
the discovery of local crude oil in the Philippines has led to its
commercial production in gradually increasing quantities;chanroblesvirtualawlibrary
WHEREAS, the domestic production of crude oil eliminates the inward
ocean freight and other incidental costs, as well as customs duties, as
cost components, thereby reducing the acquisition price of locally
produced crude oil;chanroblesvirtualawlibrary
WHEREAS, despite such a reduction in the buying price of crude oil by
local processors and refineries, it is not yet economically feasible to
reduce appreciably the selling price of petroleum products for
consumption, thereby benefiting only a group of oil refinery companies;chanroblesvirtualawlibrary
WHEREAS, it is necessary to spread the benefits arising from the
discovery and production of oil in our country to a greater number of
our people as far as possible; chanroblesvirtualawlibrary
WHEREAS, taxation, which is an accepted instrument for redistribution
of wealth, can be utilized to achieve the optimum distribution of the
said benefits which would otherwise insure to oil refineries only.
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:cralaw:red
Section 1. Section 199 of the National Internal
Revenue Code is hereby amended by inserting a new subsection thereon to
read as follows:cralaw:red
"Sec. 199. (a) Percentage tax on sales of other
articles. — There shall be levied, assessed and collected once only on
every original sale, barter, exchange, and similar transaction either
for nominal or valuable consideration, intended to transfer ownership
of, or title to, the articles not covered in Section 194, 195, 196,
197, 198 and 201, a tax equivalent to ten per centum (10%) of the gross
selling price or gross value in money of the articles so sold,
bartered, exchanged, or transferred, such tax to be paid by the
manufacturer or producer: Provided, That any percentage, specific or
mining tax paid under this title, title IV or title VII, respectively,
on domestically manufactured, processed or produced, or imported raw
materials, part, accessory or other article forming part of the
finished product shall be credited against the sales tax due on the
finished product: Provided, however, That in case the total tax paid on
the raw material, part, accessory or other article exceeds the amount
of the sales tax due on the finished product, the excess shall be
credited against the sale tax liabilities of the manufacturer for the
succeeding taxable quarters: And, provided, further, That the amount of
the tax on the raw materials, part, accessory or other article shall be
indicated as a separate item in the sale invoice. chanroblesvirtualawlibrary
"Whenever the finished product subject to sales tax is manufactured or
produced out of any raw material, part, accessory or other article
which is exempt from tax, the tax otherwise due on the latter shall be
deemed to have been paid for purposes of the next preceding paragraph.
"Any part or accessory of the above-mentioned articles shall be taxed
under this subsection." chanroblesvirtualawlibrary
"(b) Percentage tax on sales of indigenous petroleum.
— Notwithstanding the provisions of Section 202 of this Code, there
shall be levied, assessed, and collected once only on the first taxable
sale, barter, exchange or similar transaction intended to transfer
ownership of or title to indigenous petroleum, a tax equivalent to
twenty-two per centum (22%) of the fair international market price
thereof, such tax to be paid by the buyer or purchaser within fifteen
(15) days from the date of actual or constructive delivery to the said
buyer or purchaser. The phrase "first taxable sale, barter, exchange or
similar transaction" means the transfer of the indigenous petroleum in
its original state to a first taxable transferee. The fair
international market price shall be determined in accordance with
Regulations to be promulgated by the Minister of Finance upon the
recommendation of the Commissioner of Internal Revenue in consultation
with an appropriate government agency.
"For purposes of this subsection, "indigenous petroleum" shall include
locally extracted mineral oil, hydrocarbon gas, bitumen, crude asphalt,
mineral gas and all other similar or naturally associated substances
with the exception of coal, peat, bituminous shale and/or stratified
mineral deposits. chanroblesvirtualawlibrary
"In enforcing the provisions of this subsection, section 12 and the
relevant provisions of Chapter II of Title IV of this Code shall apply."
Section 2. Repealing Clause. — The provisions of any
general or special laws, decrees or orders which are in conflict or
inconsistent herewith are hereby repealed or modified accordingly.
Section 3. Effectivity. — This act shall take effect
upon its approval.
DONE in the City of Manila,
this 31st of March, in the year of Our Lord, nineteen hundred and
seventy-nine.
|