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PRESIDENTIAL DECREE NO. 1709
PRESIDENTIAL DECREE NO. 1709 -
LEVYING A SURTAX ON EXTRAORDINARY GAINS REALIZED BY OIL COMPANIES ON
PETROLEUM PRODUCTS
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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;chanroblesvirtualawlibrary
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;chanroblesvirtualawlibrary
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. 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 extraordinary gains realized by oil companies
as a result of price and specific taxes increases authorized for
petroleum products, which surtax shall not be an allowable deduction
for income tax purposes.
Section 2. Computation of Extraordinary Gains. — The
extraordinary gain shall be measured by the difference between the
approved wholesale posted prices of refined petroleum products
immediately before the authorized price increases and the new posted
prices multiplied by the number of units of petroleum products existing
as of the day of effectivity of the price increases. Any such profit or
gain so determined, shall be deemed realized during the quarter when
the authorized price increases occurred. Extraordinary gains shall not
only refer to the aggregate increases in the value of crude oil, base
stocks and refined petroleum products resulting from the authorized
price increases of petroleum products but shall also include the gains
accruing to the oil companies as a result of the upward revision of the
specific tax rates applicable to said petroleum products. chanroblesvirtualawlibrary
Section 3. Time, Manner and Place of Payment. — The
surtax herein imposed shall be paid within thirty (30) days following
the promulgation of this Decree. Oil companies will be allowed to use
the receivables which they have forthcoming from the Crude Equalization
Fund as credits to offset their liabilities for the surtax herein
imposed. The rules and regulations authorized under Section 6 hereof
may provide for installment payments.
A return therefore should be filed at the time of payment with the
Revenue District Office or Collection Agent or duly authorized
Municipal Treasurer having jurisdiction over the principal office and
place where the books of accounts and other date of the oil companies
are kept.
Section 4. Penalties. — Failure to pay the tax and to
file the corresponding tax return as hereinabove specified, as well as
any other violations of this Decree, shall be subject to surcharges,
interests and penalties provided under Title II of the National
Internal Revenue Code. chanroblesvirtualawlibrary
Section 5. Program for Investment of Balance of
Gains. — The oil companies shall prepare a program for the investment
of the balance of the extraordinary gains in their own projects which
will increase the capacity and improve the efficiency of their refining
or bulk storage and distribution facilities in the country.
Section 6. 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 all rules
and regulations in order to implement the provisions of this Decree.
Section 7. Repealing Clause. — All acts, decrees,
executive and administrative orders and other issuances which are
inconsistent herewith, are hereby repealed or modified accordingly.
Section 8. Effectivity and Applicability. — This
Decree shall apply on extraordinary gains realized beginning August 1,
1979. chanroblesvirtualawlibrary
Done in the City of Manila,
this 13th day of August, nineteen hundred and eighty.
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