Publishing Letter of Instructions No. 1051 Deferring the Implementation of Presidential Decree No. 1089 Governing the Denaturing, Taxation and Removal of Distilled Spirits or Alcohol for Blending with Gasoline or Other Motor Fuels for the Production of "Alcogas"

September 1, 1980 REVENUE MEMORANDUM CIRCULAR NO. 43-80 SUBJECT : Publishing Letter of Instructions No. 1051 Deferring the Implementation of Presidential Decree No. 1089 Governing the Denaturing, Taxation and Removal of Distilled Spirits or Alcohol for Blending with Gasoline or Other Motor Fuels for the Production of "Alcogas" TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, quoted hereunder are pertinent portions of Letter of Instructions No. 1051, dated August 1, 1980, deferring the implementation of Presidential Decree No. 1089: "Sec. I. The implementation of PD 1089 is hereby temporarily suspended until further instructions. acd "Sec. II. The Ministry of Finance, the Ministry of Energy and the Philippine National Alcohol Commission shall jointly reassess and review the specific tax on fuel alcohol and recommend, if necessary, the rate thereof as well as the timing of the continuation of the implementation of PD 1089. "Sec. III. The Commissioner of the Bureau of Internal Revenue and the Executive Director of the Philippine National Alcohol Commission shall jointly promulgate the rules and regulations pursuant to the implementation of this Letter of Instructions." Tax Implications of LOI No. 1051 The temporary suspension of the implementation of PD 1089 has deferred the imposition of the specific tax on alcohol to be blended with gasoline or other motor fuels for the production of "Alcogas" at the same rate of tax on premium gasoline (now at P1.00 per liter). acd That deferment of tax notwithstanding, distilled spirits or alcohol intended for "Alcogas" production still remains to be taxable at P0.01 as denatured alcohol for motive power under Section 153(d) of the Tax Code of 1977, as amended, since by regulations, such alcohol require prior denaturing before its removal from the distillery premises and that the end-product ("Alcogas") will be used for motive power. Until such time as the temporary suspension of the implementation of PD 1089 is lifted or a new rate of tax for alcohol intended for "Alcogas" production is prescribed, such alcohol shall be taxable at P0.01 per liter. All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular as wide publicity as possible. aisa dc RUBEN B. ANCHETA Acting Commissioner