EXECUTIVE ORDER NO. 996 - REVISING THE PERCENTAGE TAX RATE ON LOCALLY PRODUCED CRUDE OIL

WHEREAS, under Executive Order No. 988 the rate of the additional import duty imposed under Executive Order No. 955, series of 1984, was reduced from 10% to 5% for petroleum products imports effective October 15, 1984, thereby reducing the effective rate of import duty on imported crude oil from thirty-three per centrum (33%) to twenty-seven and one-half per centum (27.5%).

WHEREAS, locally produced crude oil is subject to the payment of percentage tax equivalent to thirty-three per centum of the international market price thereof as prescribed under Section 199(b) of the National Internal Revenue Code as amended;  

WHEREAS, it is necessary to revise the percentage tax rate on locally produced crude oil in order that the price thereof be placed at par with imported crude oil.

NOW THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me under Sec. 290-B of the National Internal Revenue Code, as amended, do hereby direct and order that:

Section 1. Section 199(b) of the National Internal Revenue Code of 1977, as amended, is further amended to read as follows:

“SECTION 199(b). Percentage Tax on Sales of Indigenous Petroleum.— Notwithstanding the provisions of Sec. 202 of this Code, there shall be levied, assessed and collected once on the first taxable sale, barter, exchange or similar transaction intended to transfer ownership of or title to indigenous petroleum, a tax equivalent to twenty-seven and one-half per centum of the international market price thereof such tax to be paid by the buyer or purchaser within fifteen (15) days from the date of actual or constructive delivery to the said buyer or purchaser. The phrase “first taxable sale, barter, exchange or similar transaction” means the transfer of the indigenous petroleum in its original state to a first taxable transferee. The fair international market price shall be determined in accordance with Regulations to be promulgated by the Minister of Finance upon the recommendation of the Commissioner of Internal Revenue in consultation with an appropriate government agency.

For purposes of this subsection, “indigenous petroleum” shall include locally extracted mineral oil, hydrocarbon gas, bitumen, crude asphalt mineral gas and all other similar or naturally associated substances with the exception of coal, peat, bituminous shale and/or stratified mineral deposits.

In enforcing the provisions of this subsection, Section 12 and the relevant provisions of Chapter II of Title IV of this Code shall apply.”

Sec. 2. Repealing Clause.— The provisions of any general or specific laws, decrees of orders which are in conflict or inconsistent herewith are hereby repealed or modified accordingly.  

Sec. 3. Effectivity. — This Order shall take effect on October 15, 1984.

Done in the City of Manila, this 13th day of November, in the year of Our Lord, nineteen hundred and eighty-four.