PRESIDENTIAL DECREE NO. 1709, August 13, 1980
LEVYING A SURTAX ON EXTRAORDINARY GAINS REALIZED BY OIL COMPANIES ON PETROLEUM PRODUCTS
range of refined or blended petroleum products, oil companies derived
extraordinary gains from the sale at higher prices of finished products
processed from crude oil and other base stocks acquired at lower prices;
WHEREAS, a part of such extraordinary gains should be
remitted to the Government for the benefit of a greater member of our people and
the balance of such gains be devoted by the oil companies in projects designed
to improve the capacity and efficiency of their facilities;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and decree the following:
SEC. 1. Surtax on Extraordinary Gains; Rate of Surtax
— In addition to the income imposed under Title II of the National Internal
Revenue Code, there is hereby imposed a surtax of twenty (20%) per cent on
extraordinary gains realized by oil companies as a result of price and specific
taxes increases authorized for petroleum products, which surtax shall not be an
allowable deduction for income tax purposes.
SEC. 2. Computation of Extraordinary Gains — The
extraordinary gain 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. Any such profit or gain so determined, shall be deemed realized
during the quarter when the authorized price increases occurred. Extraordinary
gains shall not only refer to the aggregate increases in the value of crude oil,
base stocks and refined petroleum products resulting from the authorized price
increases of petroleum products but shall also include the gains accruing to the
oil companies as a result of the upward revision of the specific tax rates
applicable to said petroleum products.
SEC. 3. Time Manner and Place of Payment. — The
surtax herein imposed shall be paid within thirty (30) days following the
promulgation of this Decree. Oil companies will be allowed to use the
receivables which they have forthcoming from the Crude equalization. fund as
credits to offset their liabilities for the surtax herein imposed. The rules and
regulations authorized under Section 6 hereof may provide for installment
payments.
A return therefore should be filed at the time of payment with the Revenue
District Office or Collection Agent or duly authorized Municipal Treasurer
having jurisdiction over the principal office and place where the books of
accounts and other date of the oil companies are kept.
SEC. 4. 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.
SEC. 5. Program for Investment of Balance of Gains.
— The oil companies shall prepare a program for the investment of the
balance of the extraordinary gains in their own projects which will increase the
capacity and improve the efficiency of their refining or bulk storage and
distribution facilities in the country.
SEC. 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 all rules and
regulations in order to implement the provisions of this Decree.
SEC. 7. Repealing Clause. — All acts, decrees,
executive and administrative orders and other issuances which are inconsistent
herewith, are hereby repealed or modified accordingly,
SEC. 8. Effectivity and Applicability. — This
Decree shall apply on extraordinary gains realized beginning August 1, 1979.
Done in the City of Manila this 13th day of August, nineteen hundred and
eighty.
(Sgd.) FERDINAND E. MARCOS
President of the
Philippines
By the President: (Sgd.) JACOBO C. CLAVE Presidential Executive
Assistant