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 and “unearned” gains
should be utilized for benefit of a greater, number .of our people.

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 extra-ordinary gains realized by oil companies as a result of
prices increases authorized for petroleum products which surtax shall be allowed
as part of the cost of petroleum product sold on or after November 3, 1983.

SEC. 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.

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. 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.

SEC. 4. Penalties. — Failure to pay the tax and
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. Rule 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.

SEC. 6. Repealing Clause. — All acts, decrees,
executive and administrative orders and other issuances which are inconsistent
herewith, are hereby repealed or modified accordingly.

SEC. 7. Effectivity. — This Decree shall take effect
immediately.

Done in the City of Manila, this 3rd day of November nineteen hundred and
eighty-three.

(Sgd.) FERDINAND E. MARCOS President of the Philippines