Question & AnswerQ&A (Republic Act No. 6767)
The primary amendment is the addition of a new item (4) that sets the ad valorem tax rate on naphtha used as a raw material in the production of petrochemical products to 0%.
Imported naphtha may only be used after domestic refinery-processed naphtha, if available as determined by the Energy Regulatory Board, has been utilized.
By-products such as fuel oil, diesel fuel, kerosene, pyrolysis gasoline, liquefied petroleum gases, and similar oils with comparable generating power are subject to the applicable ad valorem tax except when transferred to local oil refineries for further processing or blending.
They are exempt when transferred to any local oil refineries through sale, barter, or exchange for further processing or blending into finished products subject to ad valorem tax.
The Bureau of Internal Revenue, with the approval of the Department of Finance, is authorized to promulgate the necessary rules and regulations.
The Act took effect 15 days after its publication in the Official Gazette or a newspaper of general circulation in the Philippines.
The tax exemption applies specifically to naphtha used as a raw material in the production of petrochemical products processed by domestic refineries.
The Energy Regulatory Board's determination is essential to establish the availability of domestically processed naphtha before importing.
The Philippine Senate and House of Representatives passed RA 6767, and it was approved by President Corazon C. Aquino.
It signifies that such naphtha is exempt from ad valorem tax to encourage local production and processing of petrochemical products.