Levying a Surtax on Extraordinary Gains Realized by Oil Companies from Petroleum Products

July 1, 1983

PRESIDENTIAL DECREE NO. 1867-A

LEVYING A SURTAX ON EXTRAORDINARY GAINS REALIZED BY OIL COMPANIES FROM PETROLEUM PRODUCTS

WHEREAS, the immediate price increases on the whole range of refined or blended petroleum products have brought about extraordinary gains for oil companies on account of the sale at higher prices of finished products, processed from crude oil and other base stocks, purchased or acquired by them before the price adjustment; and

WHEREAS, a part of such extraordinary gains should be utilized to accelerate the completion/development of governmental projects,

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby decree and order the following:

SECTION 1. Surtax on Extraordinary Gains; Rate of Surtax. — In addition to the income tax imposed under Title II of the National Internal Revenue Code,there is hereby imposed a surtax of sixty five (65%) per cent on extraordinary gains realized by oil companies as a result of price 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 gains 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. Extraordinary gains shall also refer to the aggregate increases in the value of crude oil and base stocks.

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. The rules and regulations authorized under Section 5 hereof may provide for installment payments.

A return shall be filed at the time of payment with the Commissioner of Internal Revenue or Revenue Regional Director having jurisdiction over the principal office and place where the books of accounts and other data of the oil companies are kept and maintained.

SECTION 4. Special Account. — The proceeds from the surtax imposed hereunder shall accrue to a Special Account in the General Fund which shall be disbursed by the President to meet such contingencies as may be recommended by the Minister of Finance.

SECTION 5. 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.

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 rules and regulations 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. — This Decree shall take effect immediately.

DONE in the City of Manila, this 1st day of July nineteen hundred and eighty three. aScITE