Price of the Sriretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) ) First Regular Session SEP -8 P5:29 SENATE RECEIVED BY: S. No. - 1355 Introduced by Senator Bam Aquino AN ACT PROVIDING FOR THE EXEMPTION OF REFINED PETROLEUM IMPORTERS FROM THE BOND REQUIREMENT UNDER SECTION 160 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED EXPLANATORY NOTE Petroleum products are indispensable to the country's energy supply chain, powering industries, transportation, and households. Given the strategic importance of this sector, it is essential to align fiscal requirements with existing customs and tax safeguards to eliminate redundancy, reduce costs, and improve efficiency. Under existing regulations, imported refined petroleum products cannot be withdrawn from customs' custody without proof of payment of customs duties and excise taxes. Prevailing industry practice shows that excise tax is prepaid even prior to the arrival of the vessel at port. This frontloaded compliance is further reinforced by the government's mandatory fuel marking program under Republic Act No. 10963 or the TRAIN Law, which ensures that excise taxes have been paid before fuel enters the market.
Section 160 of the present Tax Code, which requires importers of excisable goods to
post a bond, traces its roots to the National Internal Revenue Code of 1939, which first codified the Philippines' tax laws into a single statute. While it may have been appropriate at the time, the context in which it was crafted particularly for general imported goods, no longer applies to imported refined petroleum products, which is already subject to multiple and rigorous layers of regulation and monitoring. Moreover, the annual premium paid for this bond forms part of the cost of goods sold and is ultimately passed on to consumers through higher pump prices. Removing this outdated and duplicative requirement will therefore help lower fuel prices and ease inflationary pressures on Filipino households. This measure proposes to exempt importers of refined petroleum products from the bond requirement under Section 160, provided that they have no outstanding customs
assessments relating to their refined petroleum importations in prior years. By recognizing the sufficiency of current enforcement mechanisms and eliminating duplicative requirements, this bill promotes regulatory efficiency while ensuring continued tax compliance. In view of the foregoing, the approval of this bill is earnestly sought. Bam Aquins
an Disre of the E rcretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES 25 SEP -8 P5:29 First Regular Session SENATE RECEIVED BY: S. No. 1355 Introduced by Senator Bam Aquino AN ACT PROVIDING FOR THE EXEMPTION OF REFINED PETROLEUM IMPORTERS FROM THE BOND REQUIREMENT UNDER SECTION 160 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled: 1 Section 1. Section 160 of the National Internal Revenue Code (NIRC), as amended, is 2 hereby amended to read as follows: "Section 160. Manufacturers' and Importers' Bond. - Manufacturers and importers of articles subject to excise tax shall post a bond subject to the following conditions: (A) Initial Bond. - In case of initial bond, the amount shall be equal to One Hundred thousand pesos (PhP100,000): Provided, That if after six (6) months of operation, the amount of initial bond is less than the amount of the total excise tax paid during the period, the amount of the bond shall be adjusted to twice the tax actually paid for the period. (B) Bond for the Succeeding Years of Operation. - The bonds for the succeeding years of operation shall be based on the actual total excise tax paid during the period the year immediately preceding the year of operation.
Such bond shall be conditioned upon faithful compliance, during the time such business is followed, with laws and rules and regulations relating to such business and for the satisfaction of all fines and penalties imposed by this Code. IMPORTERS OF REFINED PETROLEUM PRODUCTS SHALL BE EXCLUDED FROM THE COVERAGE OF THIS SECTION, PROVIDED THAT NO OUTSTANDING ASSESSMENTS EXIST FOR CUSTOM DUTIES OR EXCISE TAXES ARISING FROM THE IMPORTATION OF SUCH PRODUCTS IN ANY PRIOR YEAR. 9 Sec. 2. Implementing Rules and Regulations. - Within ninety (90) days from the effectivity of this Act, the DOF, in consultation with the BOC and appropriate government agencies, shall promulgate rules and regulations necessary for the 12 effective implementation of this Act. 13 Sec. 3. Separability Clause. - If any provision of this Act is declared unconstitutional 14 or invalid, the other provisions not affected thereby shall remain in full force and 15 effect. 16 Sec. 4. Repealing Clause. - All laws, decrees, orders, rules and regulations, or other 17 issuances or parts thereof inconsistent with the provisions of this Act are hereby 18 repealed and modified accordingly.
Sec. 5. Effectivity. - This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation. Approved,