Question & AnswerQ&A (EXECUTIVE ORDER NO. 959)
Presidential Decree 1615 initially imposed a 22% percentage tax on locally produced crude oil, and it took effect on March 13, 1979.
The percentage tax rate on locally produced crude oil is set at thirty-three percent (33%) of the fair international market price.
The buyer or purchaser of the locally produced crude oil is responsible for paying the percentage tax within fifteen (15) days from the date of actual or constructive delivery.
It refers to the transfer of indigenous petroleum in its original state to the first taxable transferee.
Indigenous petroleum includes locally extracted mineral oil, hydrocarbon gas, bitumen, crude asphalt, mineral gas, and all similar or naturally associated substances, except coal, peat, bituminous shale, and/or stratified mineral deposits.
The fair international market price is determined according to regulations promulgated by the Minister of Finance upon the recommendation of the Commissioner of Internal Revenue, in consultation with an appropriate government agency.
Section 12 and the relevant provisions of Chapter II of Title IV of the National Internal Revenue Code apply in enforcing this tax.
The revision was necessary due to the realignment of the ad valorem duty on imported crude oil, to maintain parity and prevent undue advantage of local crude oil producers over importers.
The Executive Order took effect on August 1, 1984.
Any conflicting or inconsistent laws, decrees, or orders are repealed or modified accordingly.