Publishing Presidential Decree No. 1089 Prescribing the Specific Tax on Distilled Spirits or Alcohol To Be Used for Blending With Gasoline or Other Motor Fuels for Motive Power

May 16, 1977 REVENUE MEMORANDUM CIRCULAR NO. 13-77 SUBJECT : Publishing Presidential Decree No. 1089 Prescribing the Specific Tax on Distilled Spirits or Alcohol To Be Used for Blending With Gasoline or Other Motor Fuels for Motive Power TO : All Internal Revenue Officers concerned For the information and guidance of all concerned, quoted hereunder are pertinent portions of Presidential Decree No. 1089 prescribing the specific tax on distilled spirits or alcohol to be used for blending with gasoline or other motor fuels for motive power: "SECTION 1. The provisions of any law to the contrary notwithstanding, ethyl alcohol, denatured alcohol or any distilled spirits, whether rectified or absolute, if produced domestically from locally produced raw materials, and when removed from the place of production or distillery plant by the manufacturer thereof for delivery to oil companies for use by the latter for blending with motor gasoline or other motor fuels to be used for motive power, shall, regardless of proof or alcoholic strength, be subject to specific tax at the same rate as the specific tax on automotive gasoline of the higher octane rating, more commonly known as "premium", "special", "extra" or "boron" gasoline or by some other name of similar meaning or descriptive intent: Provided , That if denatured alcohol for motive power taxable under Section 142(d) of the National Internal Revenue Code, as amended, shall be further mixed, blended or processed with motor gasoline or other motor fuels as contemplated under this Decree, such denatured alcohol shall be subject to specific tax at the same rate as the tax on motor gasoline of the higher octane rating in lieu of the rate of the tax prescribed under Section 142(d) of the same Code: And, Provided, Further , That if rectified ethyl alcohol, regardless of proof or alcoholic strength, is to be blended with motor gasoline or other motor fuels for motive power as authorized by this Decree, such alcohol must first be suitably denatured and rendered unfit for the manufacture of intoxicating beverages before removal from the distillery, rectifying plant or place of production. ''SECTION 2. The Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, shall promulgate appropriate rules and regulations to implement this Decree. "SECTION 3. This Decree shall take effect upon the issuance of rules and regulations." Amendatory Features of the Decree (1) The prevailing rate of specific tax on domestic distilled spirits prescribed under Section 133(a) of the Tax Code, as amended, shall not apply to domestic distilled spirits or alcohol if the same is to be used for blending with gasoline or other motor fuels for motive power in accordance with Presidential Decree No. 1089. In lieu thereof, the new rate of specific tax on gasoline of the higher octane rating, more commonly known as "premium", "special", "extra", or "boron" gasoline or by some other name of similar meaning or descriptive intent, shall be collected on such distilled spirits at P0.55 per liter of volume capacity as prescribed under Section 142(c) of the Tax Code, as amended by Presidential Decree No. 1122, effective April 21, 1977. (2) If domestic distilled spirits or alcohol has been denatured for motive power and the tax thereon paid under Section 142(d) of the Tax Code at P0.01 per liter, is further mixed, blended or processed with gasoline or other motor fuels for motive power as contemplated under Presidential Decree No. 1089, a tax differential of P0.54 per liter is due and collectible on said alcohol. The tax differential represents the difference between the tax due at P0.55 per liter and the tax paid at P0.01 per liter under Section 142(d). (3) In order to safeguard government revenues, Presidential Decree No. 1089 further provides that any distilled spirits or alcohol to be blended with gasoline or other motor fuels within the purview of said Decree, such alcohol must first be suitably denatured and rendered unfit for the manufacture of intoxicating beverages before removal from the distillery, rectifying plant or place of production. This is a safeguard against the unlawful manufacture of intoxicating liquors from distilled spirits or alcohol intended for blending with gasoline or other motor fuels for motive power taxed at P0.55 per liter or at the same rate as for premium gasoline pursuant to Presidential Decree No. 1089. On the other hand, alcohol to be used for compounding intoxicating liquors is taxed at P1.00 per proof liter or equivalent to P1.89 per liter if said alcohol is 189 proof. (4) Effectivity date of the specific tax on distilled spirits or alcohol to be used for blending with gasoline or other motor fuels for motive power . Pursuant to Presidential Decree No. 1089, said Decree shall take effect upon issuance of rules and regulations. Revenue Regulations No. 6-77 implementing said Decree have been promulgated and approved on May 5, 1977; and therefore, the specific tax on alcohol to be used for blending with gasoline and other motor fuels for motive power in accordance with Presidential Decree No. 1089 at the present rate of P0.55 per liter takes effect on May 5, 1977. All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular as wide a publicity as possible. EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-8