Automatic Suspension or Reduction of Excise Tax on Petroleum Products

CONGRESS OF THE PHILIPPINES TWENTIETH CONGRESS First Regular Session SENATE S. No. 1982 PREPARED JOINTLY BY THE COMMITTEES ON WAYS AND MEANS; AND ENERGY WITH SENATORS EJERCTIO, MARCOS, AQUINO, LAPID, VILLANUEVA, CAYETANO (P), CAYETANO (A), TULFO (E), ESCUDERO, PANGILINAN, LEGARDA, GO, VILLAR (C), AND ESTRADA AS AUTHORS AN ACT AUTHORIZING THE PRESIDENT TO SUSPEND OR REDUCE EXCISE TAX ON PETROLEUM PRODUCTS, AMENDING FOR THE PURPOSE SECTION 148 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section 148 of the National Internal

2 Revenue Code (NIRC) of 1997, as amended, is • hereby further amended to read as follows: "Section 148. Manufactured Oils and Other Fuels. - xxx [Eor the period covering 2018 to 2020, the scheduled inerease in the exeise tax on fuel as imposed in this Section shall be suspended when the average Dubai crude oil price based on Mean of Platte Singapore (MOPS) for three (3)

monthe prior to the scheduled increase of the month reacheo or exeeede Eighty dollare (USD 80) per barrel.] [Provided, That the Department of Finance shall perform an annual review of the implementation of the exeise tax on fuel and shall, based on projections provided and recommendations of the Development budget coerdination Committee, as reconeiled from the conditione as provided above, recommend the implementation or suepencion of the exeise tax fuel: Provided, further, That the recommendation shall be given on a yearly basis: Provided, finally, That any suspension of the increase in excise tax shall not result in any reduetion of the excise tax being imposed at the time of the suspencion.] "THE PRESIDENT MAY, UPON THE RECOMMENDATION OF THE DEVELOPMENT BUDGET COORDINATION COMMITTEE (DBCC), IN COORDINATION WITH THE SECRETARY OF ENERGY, SUSPEND THE IMPOSITION OF OR REDUCE THE EXCISE TAXES ON FUEL UNDER THIS SECTION WHEN THE AVERAGE DUBAI CRUDE OIL PRICE BASED

ON MEAN OF PLATTS SINGAPORE (MOPS) REACHES OR EXCEEDS EIGHTY US DOLLARS (USD 80) PER BARREL FOR ONE (1) MONTH IMMEDIATELY PRECEDING THE ISSUANCE OF THE SUSPENSION OR REDUCTION ORDER. THE SUSPENSION OR REDUCTION MAY BE APPLIED TO SPECIFIC PETROLEUM PRODUCTS, AND IMPLEMENTED EITHER AS A FULL SUSPENSION OR PARTIAL REDUCTION OF THE APPLICABLE EXCISE TAX RATES UNDER THIS SECTION, AS MAY BE WARRANTED BY PREVAILING CONDITIONS. ANY SUSPENSION OR REDUCTION AUTHORIZED UNDER THIS SECTION SHALL BE EFFECTIVE FOR A PERIOD NOT EXCEEDING THREE (3) MONTHS: PROVIDED, THAT THE AGGREGATE PERIOD OF THE SUSPENSION OR REDUCTION SHALL NOT EXCEED ONE (1) CALENDAR YEAR: PROVIDED, FURTHER, THAT THE EXCISE TAX ON FUEL PRODUCTS SHALL REVERT AUTOMATICALLY TO THE RATES PROVIDED UNDER THIS SECTION,

WITHOUT NEED FOR FURTHER LEGISLATIVE OR EXECUTIVE ACTION, UPON OCCURRENCE OF ANY OF THE FOLLOWING CONDITIONS, WHICHEVER COMES FIRST: (A) ONE (1) WEEK AFTER THE ONE (I) MONTH AVERAGE OF DUBAI CRUDE OIL PRICE BASED ON MOPS FALLS BELOW EIGHTY US DOLLARS (USD 80) PER BARREL, AS DULY CERTIFIED BY THE DEPARTMENT OF. ENERGY (DOE); OR (B) AFTER THREE (3) MONTHS: PROVIDED, THAT THE POWER OF THE PRESIDENT TO TEMPORARILY SUSPEND OR REDUCE THE EXCISE TAX ON PETROLEUM PRODUCTS GRANTED UNDER THIS SECTION SHALL BE EXERCISED ONLY UNTIL DECEMBER 31, 2028. WITHIN FIFTEEN (15) DAYS FROM THE ISSUANCE OF THE SUSPENSION OR REDUCTION ORDER, AND EVERY MONTH THEREAFTER, THE PRESIDENT SHALL, THROUGH THE DBCC, IN COORDINATION WITH THE DOE, SUBMIT TO THE HOUSE OF REPRESENTATIVES AND THE SENATE A REPORT ON THE FOLLOWING:

(1) THE FACTUAL BASIS AND POLICY GOALS FOR THE SUSPENSION OR REDUCTION OF EXCISE TAXES; (2) THE ESTIMATED FOREGONE REVENUES, INCLUDING AFFECTED SOCIAL BENEFITS FOR DIFFERENT HOUSEHOLD DECILES; AND (3) THE EXPECTED IMPACT ON INFLATION AND FUEL PRICES, A COST- BENEFIT ANALYSIS, AN ASSESSMENT OF POSSIBLE MARKET DISTORTIONS, LEAKAGES, OR UNINTENDED CONSEQUENCES ARISING FROM THE SUSPENSION OR REDUCTION OF EXCISE TAXES, AND OTHER ECONOMIC ACTIVITY. THE REPORT SHALL INCLUDE A RECOMMENDATION ON WHETHER THE SUSPENSION OR REDUCTION OF EXCISE TAXES SHOULD BE MAINTAINED, MODIFIED, OR LIFTED, AND SHALL FORM PART OF THE BASIS FOR ANY CONTINUED SUSPENSION OR REDUCTION. DURING THE SUSPENSION OR REDUCTION OF EXCISE TAX UNDER THIS SECTION, OIL COMPANIES SHALL SUBMIT TO THE DOE MONTHLY INFORMATION ON

THE COST COMPONENTS OF THE PRICE OF PETROLEUM PRODUCTS SOLD: PROVIDED, THAT THE DOE SHALL SUBMIT SUCH MONTHLY INFORMATION TO THE DBCC AND THE CONGRESS: PROVIDED, FURTHER, THAT THE BUREAU OF INTERNAL REVENUE AND THE BUREAU OF CUSTOMS SHALL LIKEWISE SUBMIT TO CONGRESS MONTHLY INFORMATION ON THE DECLARED VALUE AND VOLUME OF PETROLEUM PRODUCTS THE EXCISE TAX ON WHICH, HAS BEEN SUSPENDED OR REDUCED BY THE PRESIDENT PURSUANT TO THIS SECTION, AS USED FOR THE IMPOSITION OF VALUE ADDED TAX UNDER THIS ACT."

SEC. 2. Separability Clause. - If any portion or

provision of this Act is declared unconstitutional, the remainder of this Act or any provisions not affected thereby shall remain in force and effect.

SEC. 3. Repealing Clause. - Any law, presidential

decree or issuance, executive order, letter of instruction, rule, or regulation inconsistent with the provisions of this Act is hereby repealed or modified accordingly.

SEC. 4. Effectivity. - This Act shall take effect after

fifteen (15) days following its publication in the Official Gazette or in a newspaper of general circulation. Approved,