Prescribing the Rules for the Implementation of Presidential Decree No. 1956 Imposing an Ad Valorem Tax on Certain Oil Products and Revising the Rates of Specific Tax Thereon

October 12, 1984 REVENUE REGULATIONS NO. 21-84 SUBJECT : Prescribing the Rules for the Implementation of Presidential Decree No. 1956 Imposing an Ad Valorem Tax on Certain Oil Products and Revising the Rates of Specific Tax Thereon TO : All Internal Revenue Officers and Others Concerned SECTION 1 . Scope . Pursuant to the provisions of Section 326 in relation to Section 153 of the National Internal Revenue Code, as amended, and PD No. 1956, the following Revenue Regulations are hereby promulgated to implement the provisions thereof. SECTION 2 . Manufactured oils and other fuels subject to ad valorem tax . An ad valorem tax is imposed on the following oil products with the corresponding rates: (a) Kerosene, fourteen per centum ; (b) Naphtha, regular gasoline and similar products of distillation, twenty-five per centum ; cdt (c) Premium and aviation gasoline, twenty-five per centum ; (d) Thinners and solvents, twenty-five per centum ; (e) Liquefied petroleum gas, fourteen per centum ; (f) Asphalt, fourteen per centum ; (g) Aviation turbo jet fuel, twenty-five per centum ; (h) Fuel oil, commercially known as bunker fuel oil, and all similar fuel oils, having more or less the same generating power, seven per centum ; and (i) Fuel oil, commercially known as diesel fuel oil, and on similar fuels, having more or less the same generating capacity, twenty-five per centum . The ad valorem tax imposed herein is in addition to the specific tax imposed under Section 7 hereof. SECTION 3 . Bases of the ad valorem tax . The ad valorem tax shall be based on the wholesale posted price net of specific and domestic ad valorem taxes of the oil product concerned, as approved by the Board of Energy. SECTION 4 . Payment of ad valorem tax on locally manufactured petroleum products . The ad valorem tax due on petroleum products shall be paid to the Commissioner in cash or in manager's check through the "Payment Order" system within fifteen (15) days from the date of removal from the place of production. Provided, however , that the ad valorem tax on petroleum products stored at the bonded terminals or warehouses owned and/or operated by the Philippine National Oil Company or its subsidiaries shall be paid immediately before removal therefrom. SECTION 5 . Payment of ad valorem tax on imported products . The ad valorem tax on imported petroleum products shall be paid by the owner or importer before the release of such products from customs custody or by the person who is found in possession of the petroleum products which are exempt from specific tax other than those to whom the same are lawfully issued. SECTION 6 . Recording ad valorem tax payments . A special book shall be kept by the manufacturer jointly with the Revenue Inspector assigned in his oil refinery or bonded warehouse wherein to record these ad valorem tax payments. Accordingly, the first advance payment by the manufacturer for his tax liability shall constitute as a debit entry in said book from where the ad valorem tax application shall be deducted and shall constitute as a credit entry in the same book. A balance of the advance payment, if any, shall be struck after every such tax application in order to keep a running account of the same. No removals shall be allowed unless the ad valorem tax is first paid thereon or unless there is sufficient balance of ad valorem tax to be applied herein. In order that a debit entry may be made in the special book prescribed herein to records as advance payment of the ad valorem tax, the manufacturer must show the original of the "Payment Order" and the Bank's Confirmation Receipt issued therefor to the Revenue Inspector assigned in his factory who shall sign legibly his name at the back thereof and retaining always a xerox copy of every such Payment Order and Confirmation Receipt for his file and which he will submit weekly to the Chief, Oil and Miscellaneous Tax Division or the Chief, Specific Tax Area Team on the first working day following the week. To confirm ad valorem tax payments or application on every removal of petroleum products, the amount so paid must be indicated in the sales or delivery invoices covering every such removal duly validated by the Revenue Inspector assigned in the factory by affixing his signature in the sales or delivery invoice. He shall prepare an abstract of such sales or delivery invoices the same to be submitted weekly to the Chief, Oil & Miscellaneous Tax Division or the Chief, Specific Tax Area Team on the first working day following the week. SECTION 7 . Specific tax on manufactured oils and other fuel oils . On refined and manufactured mineral oils and motor fuels, there shall be collected the following specific taxes which shall attach to the articles hereunder enumerated as soon as they are in existence as such: (a) Lubricating oil, per liter of volume capacity, four pesos and fifty centavos; (b) Naphtha, regular gasoline and all other similar products of distillation, per liter of volume capacity, one peso and twenty-nine centavos; Provided , that on premium and aviation gasoline the tax shall be one peso and eighteen and one-half centavos; (c) On denatured alcohol to be used for motive power, per liter of volume capacity, one centavo: Provided , That, unless otherwise provided for by special laws, if the denatured alcohol is mixed with gasoline, the specific tax on which has already been paid, only the alcohol content shall be subject to the tax herein prescribed. For the purposes of this subsection, the removal of denatured alcohol of not less than one hundred eighty degrees proof (ninety per centum absolute alcohol) shall be deemed to have been removed for motive power, unless shown to the contrary; (d) Processed gas, per liter of volume capacity, five centavos; (e) Thinners and solvents, one peso and twenty centavos; (f) Liquefied petroleum gas, per kilogram, sixty two and one-half centavos; Provided , That liquefied petroleum gas used for motive power shall be taxed at a rate equivalent to ad valorem tax on diesel fuel oil; (g) Greases, waxes and petrolatum, per kilogram, four pesos and fifty centavos; (h) Aviation turbo jet fuel, per liter of volume capacity, one peso and twenty centavos; and (i) Fuel oil, commercially known as bunker fuel oil, and on all similar fuel oils, having more or less the same generating power, twenty-five centavos per liter of volume capacity . SECTION 8 . Penalties . The penalties and liabilities prescribed under the pertinent provisions of Title IV relative to the payment of specific tax shall likewise apply in the case of ad valorem tax imposed herein. cd i SECTION 9 . Applicability of Petroleum Products Regulations . The pertinent provisions of Revenue Regulations No. 13-77, otherwise known as Petroleum Products Regulations which are not inconsistent with these regulations shall apply. SECTION 10 . Repealing Clause . All regulations, orders and other issuances or portions thereof, inconsistent with the provisions of these regulations, are hereby revoked or modified accordingly. SECTION 11 . Effectivity . These regulations shall take effect on October 15, 1984. ALFREDO PIO DE RODA Acting Minister of Finance Recommending Approval: RUBEN B. ANCHETA Acting Commissioner