REDUCTION OF THE RATES OF IMPORT DUTY ON CRUDE PETROLEUM OILS AND REFINED PETROLEUM PRODUCTS UNDER EXECUTIVE ORDER 336, SERIES OF 2004, “MODIFYING THE RATES OF IMPORT DUTY ON CR…

WHEREAS, Section 6 (Tariff Treatment) of RA 8479, otherwise known as the “Downstream
Oil Industry Deregulation Act of 1998″, provides: “Any law to the
contrary notwithstanding and starting with the effectivity of this Act, a
single and uniform tariff duty shall be imposed and collected both on
imported crude oil and imported refined petroleum products at the rate
of three percent (3%): Provided, however, that the President of the
Philippines may, in the exercise of his powers, reduce such tariff rate
when in his judgment such reduction is warranted, pursuant to Republic
Act No. 1937, as amended, otherwise known as the “Tariff and Customs
Code”: Provided, further, That beginning January 1, 2004 or upon
implementation of the Uniform Tariff Program under the World Trade
Organization and ASEAN Free Trade commitments, the tariff rate shall be
automatically adjusted to the appropriate level notwithstanding the
provisions under this Section.”

WHEREAS, Section 401 and 402 of the Tariff and Customs Code of
1978 (Presidential Decree No. 1464), as amended, empower the President
of the Republic of the Philippine to increase, reduce, or remove
existing rates of import duty, as well as to modify the form of duty and
the tariff nomenclature, under Section 104 of the Code;

WHEREAS, the adjustment in import duty per Executive Order No.
336 is only an interim revenue measure until Congress enacts new laws on
taxes for petroleum products;

WHEREAS, the Government has a commitment with the Association of
Southeast Asian Nations (ASEAN) Free Trade Area Council to adjust the
levels of duty when new laws on taxes for petroleum products are passed;

WHEREAS, the recently-passed Republic Act No. 9337 (RA 9337),
expanding the base of the value-added tax (VAT), will result in
increased Government revenue by imposing, among others, VAT on petroleum
products;

WHEREAS, the implementation of RA 9337 will result to an increase
in retail prices of LPG of over P40.00 per 11 kg cylinder and average
of about P1.70/liter for petroleum products despite the rationalization
of excise taxes/reduction to zero of the excise tax on
socially-sensitive products (kerosene, diesel and fuel oil);

NOW, THEREFORE, I, GLORIA MACAPAGAL ARROYO, President of the
Philippines, by virtue of the powers vested in me by law, do hereby
order:

SECTION 1. The articles specifically listed in Annex “A^*”
hereof, as classified under Section 104 of the Tariff and Customs Code
of 1978, as amended, whose duties were adjusted from three percent (3%)
to five percent (5%) by virtue of Executive Order 336, shall be subject
to its original rates of import duty [Most-Favored-Nation (MFN) and
ASEAN Free Trade Area (AFTA) – Common Effective Preferential Tariff
(CEPT)] indicated in Columns 4 and 5 opposite each article.

SEC. 2. The AFTA-CEPT rates so indicated in Annex “A”
shall be accorded to imports coming from ASEAN Member States applying
CEPT concession to the same product pursuant to Article 4 of the
Agreement on the CEPT Scheme for the ASEAN Free Trade Area (CEPT
Agreement), signed on 28 January 1992, and its Interpretative Notes.

SEC. 3. The rates of import duty on tariff headings not
enumerated and those listed but represented by the symbol “X X X” shall
remain in force and in effect.

SEC. 4. Upon the effectivity of this Executive Order,
all articles listed in Annex “A” which are entered and withdrawn from
warehouses in the Philippine for consumption shall be levied the MFN
rates of duty therein prescribed.

SEC. 5. Upon the effectivity of this Executive Order,
all articles listed in Annex “A” which are entered and withdrawn from
warehouses in the Philippines for consumption shall be imposed the
AFTA-CEPT rates of duty therein prescribed subject to qualification
under the Rules of Origin as provided for in the CEPT Agreement.

SEC. 6. All presidential issuances, administrative rules
and regulations or parts thereof, which are contrary to or inconsistent
with this Executive Order are hereby revoked or modified accordingly.

SEC. 7. This Executive Order shall be published in two
(2) newspapers of general circulation in the Philippines and shall take
effect on date of effectivity of RA 9337 or the VAT Reform Law.

Adopted: 29 June 2005

(SGD.) GLORIA ARROYO

By the President:

(SGD.) EDUARDO R. ERMITA

Executive Secretary

^* Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.