Senate Office of the Secretary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session MAR -5 A9:37 SENATE RECEIVED BY: Senate Bill No. 1935 Introduced by Senator Erwin T. Tulfo AN ACT PROVIDING FOR THE AUTOMATIC SUSPENSION OF VALUE-ADDED TAX AND EXCISE TAXES ON FUEL, AMENDING SECTIONS 106, 107, AND 148 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED EXPLANATORY NOTE Fuel is a critical input in transportation, agriculture, power generation, and the production and distribution of goods. For a net oil- importing country like the Philippines, spikes in global crude prices immediately translate into higher pump prices, rising inflation, and heavier burdens on Filipino families and businesses. The ongoing armed conflict in the Gulf Region has heightened instability in a part of the world that supplies a significant portion of global oil. Escalating hostilities and threats to key shipping routes create uncertainty in supply and exert upward pressure on crude prices. These geopolitical risks expose the Philippines to sudden and sharp fuel price increases beyond its control. Under existing laws, however, there is no automatic mechanism that cushions consumers when global oil prices surge. The continued imposition of the twelve percent (12%) Value-Added Tax (VAT) and excise taxes on fuel during extraordinary price spikes compounds the
impact on consumers because these taxes are layered on top of already elevated base prices. This bill establishes a clear and objective trigger for relief. When the average Dubai crude oil price based on the Mean of Platts Singapore (MOPS) reaches or exceeds Eighty Dollars (USD 80) per barrel, the VAT on the sale and importation of fuel and the excise tax on manufactured oils and other fuels shall be automatically suspended. Such suspension activates only under clearly defined global price conditions and ceasing once prices normalize. The measure ensures immediate and automatic relief during periods of global oil price shocks, mitigation of fuel-driven inflation, and protection of household purchasing power and economic stability. In view of the foregoing, the immediate passage of the bill is earnestly sought. ERWIN T. TULFO
Senate Office of the Secretarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES MAR -5 A9:37 First Regular Session RECEIVED BY: SENATE Senate Bill No. 1935 Introduced by Senator Erwin T. Tulfo AN ACT PROVIDING FOR THE AUTOMATIC SUSPENSION OF VALUE-ADDED TAX AND EXCISE TAXES ON FUEL, AMENDING SECTIONS 106, 107, AND 148 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:
SECTION 1. Section 106 of the National Internal Revenue Code
of 1997 (NIRC), as amended, is hereby further amended to read as follows: "SEC. 106. Value-Added Tax on Sale of Goods or Properties. - "(A) Rate and Base of Tax. - There shall be levied, assessed and collected on every sale, barter or exchange or goods or properties, value-added tax equivalent to twelve percent (12%) of the gross sales of the goods or properties sold, bartered or exchange, such tax to be paid by the seller or transferor: PROVIDED, THAT THE VALUE- ADDED TAX ON THE SALE OF FUEL AS USED IN SECTION
148 OF THIS ACT SHALL BE SUSPENDED WHEN THE AVERAGE DUBAI CRUDE OIL PRICE BASED ON MEAN OF PLATTS SINGAPORE (MOPS) REACHES OR EXCEEDS EIGHTY DOLLARS (USD 80) PER BARREL." "xxX.
SEC. 2. Section 107 of the National Internal Revenue Code of
1997 (NIRC), as amended, is hereby further amended to read as follows: "SEC. 107. Value-Added Tax on Importation of Goods. "(A) In General. - There shall be levied, assessed and collected on every importation of goods a value-added tax equivalent to twelve percent (12%) based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties, excise taxes, if any, and other charges, such tax to be paid by the importer prior to the release of such goods from customs custody: Provided, That where the customs duties are determined on the basis of the quantity or volume of the goods, the value-added tax shall be based on the landed cost plus excises taxes if any: PROVIDED, FURTHER, THE VALUE- ADDED TAX ON THE IMPORTATION OF FUEL AS USED IN
SECTION 148 OF THIS ACT SHALL BE SUSPENDED
WHEN THE AVERAGE DUBAI CRUDE OIL PRICE BASED ON MEAN OF PLATTS SINGAPORE (MOPS) REACHES OR EXCEEDS EIGHTY DOLLARS (USD 80) PER BARREL.
SEC. 3. Section 148 of the National Internal Revenue Code of
1997 (NIRC), as amended, is hereby further amended to include the following as the last paragraph thereof:
"Sec. 148. Manufactured Oils and Other Fuels. — There shall be collected on refined and manufactured mineral oils and motor fuels, the following excise taxes which shall attach to the goods hereunder enumerated as soon as they are in existence such as: "XXX "THE EXCISE TAX ON FUEL AS IMPOSED IN THIS SECTION SHALL BE AUTOMATICALLY SUSPENDED WHEN THE AVERAGE DUBAI CRUDE OIL PRICE BASED ON MOPS REACHES OR EXCEEDS EIGHTY DOLLARS (USD 80) PER BARREL."
SEC. 4. Implementing Rules and Regulations. - Within thirty (30)
days from the effectivity of this Act, the Secretary of Finance shall, upon recommendation of the Commissioner of Internal Revenue, shall issue the necessary rules and regulations for its effective implementation.
SEC. 5. Separability Clause. - Should any provision or part of
this Act be declared unconstitutional or invalid, the other provisions and parts hereof, insofar as they are separable from the invalid ones, shall remain in full force and effect.
SEC. 6. Repealing Clause. - All laws, decrees, orders, issuances,
rules, and regulations or parts thereof, which are inconsistent with this Act are hereby repealed or modified accordingly.
SEC. 7. Effectivity. - This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in at least two (2) newspapers of general circulation. Approved,