Law Summary
Amendment to Tariff Rates on Petroleum Oils
- Tariff Heading No. 27.09 of the Tariff and Customs Code is amended to alter duty rates on petroleum oils.
- Petroleum oils used as fuel oils for generating electric power imported by electric utilities are subject to 10% ad valorem duty.
- Other petroleum oils continue to be subject to 20% ad valorem duty.
Tax Credit or Refund on Petroleum Oils for Electric Power Generation
- New provision inserted in Sec. 106 of the Tariff and Customs Code granting tax refunds or credits on petroleum oils imported by non-electric utilities but sold (directly or indirectly) to electric utilities for power generation.
- Refund or tax credit may be up to 50% of the duty imposed on such oils.
- The Commissioner of Customs, with the Secretary of Finance's approval, shall prescribe implementing rules and regulations for this provision.
Mandate to Pass Savings to Consumers and Enforcement Measures
- All savings realized by electric franchise holders from reduced franchise tax, tariff reductions, and tax credits must be passed on to the end consumers.
- The Secretary of Finance is tasked with promulgating rules, regulations, and a reporting system to ensure compliance.
- Violations of this mandate or related regulations are punishable with:
- A fine of up to P50,000.00,
- Imprisonment of up to six (6) months,
- Potential compulsory price or rate reductions, either prospective or retroactive, ordered by the Secretary of Finance.
- When the offender is a juridical person, the manager or person managing the business is held liable.
Effectivity
- The decree took effect immediately upon issuance on September 11, 1974.