[ KRI REVENUE REGULATIONS NO. 7-90, October 03, 1990 ]

REVENUE REGULATIONS IMPLEMENTING REPUBLIC ACT NO. 6995 - AN ACT REVISING THE FORM OF TAXATION ON PETROLEUM PRODUCTS FROM AD VALOREM TO SPECIFIC, AMENDING FOR THE PURPOSE SECTION 145 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED



SECTION 1. Scope - Pursuant to the provisions of Section 245 in relation to Section 4 of the National Internal Revenue Code, as amended, these regulations are hereby promulgated to implement the provisions of R.A. 6965, amending Section 145 of Title VI of the said Code revising the form of excise tax on manufactured oil and other fuel products from ad valorem tax to specific tax.

SECTION 2. Definition of Terms - For purposes of these regulations and for a more effective enforcement and collection of specific taxes, the following words and phrases shall have the sense and meaning indicated below:

  1. The term œspecific tax  means an excise tax which imposes a specific amount based on weight or volume capacity or any other physical unit of measurement.
  2. The term œvolume capacity  is the quantity of petroleum products at air at the time of removal from the place of production.
  3. The term œat air  is the room temperature or of the environment in which any physical or chemical event occurs.
  4. The term œ basestock  is a residue left from distillation or refining or the bottom products derived from distillation.
  5. The term œhigh vacuum distillates  includes lubricants, waxes, asphalts, and greases which are derived from distillates boiling above 370 degrees centigrade and are separated by vacuum distillation and then treated and refined to meet quality requirements.
  6. The term œaromatic extracts  means extracts derived from aromatic materials produced by solvent extraction using N- methylpyrrolidienone, phenol, or furfural which are common solvents and includes BTX (benzene, toluene, xylene) from naphtha fractions used for chemical manufacture, upgrading middle distillates such as kerosene, diesel, and jet fuel.
  7. The term œpetroleum additives  means any material which, when incorporated in finished petroleum products supplement their natural characteristics and improve their performance in existing applications or broaden the areas of their suitability.
SECTION 3.       Rate and Base of Tax - The following petroleum products indicated below are subject to the specific tax in the amount as follows:
Petroleum Products Rate of Tax    
a)
Lubricating oils and greases including but not limited to basestock for lube oils and greases, high vacuum distillates, aromatic extracts and other similar preparations and additives for lubricating oils and greases whether such additives are petroleum base or not.
P4.50 per liter
    
b)
Processed gas
 
0.05 per liter
   
c)
Waxes and petrolatum
3.50 per kilogram
    
d)
Denatured alcohol (motive power)
0.05 per liter
   
e)
Naphtha and regular gasoline
2.28 per liter
   
f) 
Premium gasoline
2.52 per liter
    
g)
Aviation turbo jet fuel
2.38 per liter
    
h)
Kerosene
0.50 per liter
   
i)
Diesel fuel oil
0.45 per liter
    
j)
Liquefied petroleum
0.00 per liter
    
k)
Liquefied petroleum (used for motive gas power)
0.45 per liter
   
l)
Asphalts
0.56 per kilogram
   
m)
Bunker fuel oil
0.00 per liter
   
n)
Naphtha (used as a raw material)
0.00 per liter
    

SECTION 4.       Manner of Removal - Petroleum products which are taxed by law in kilograms or liters shall be removed from the place of production based on the unit of measurement prescribed by law, i.e. in kilograms, liters, or at air, as the case may be.  The same units of measurement shall also be used in recording, reporting, and monitoring of such products.

SECTION 5.       Illustrative Computation of Specific Tax on Petroleum Products -

A.  Case I - Tax due on 500 metric tons ( mts.) of diesel fuel oil removed from the place of production on October 1, 1990.

1 mt. of diesel fuel oil      =    1,200 liters ( lts.)

                                              ( standard conversion)

Specific tax rate on diesel: P0.45 per liter

COMPUTATION:

500 mts. x 1,200 lt.
= 
600,000 lts.
 
600,000 lts . x P0.45
=
P270,000.00 specific tax due to be paid within 15 days (i.e. Oct. 1-16, 1990) from date of removal from the place of production
 

B. Case II - Tax due on 1,000 liters ( lts.) of grease removed from place of production on October 1, 1990.

Specific tax rate on grease: P4.50 per liter

COMPUTATION:

1,000 lts . x P4.50   =    P4,500.00 specific tax due to be paid within 15 days ( Oct. 1-16, 1990) from date of removal from the place of production

All taxes due on domestic petroleum products are payable within 15 days from date of removal from place of production.

C. Case III - Tax due on importation of 500 drums at 210 liters (standard content) of lube oil additives due for release from customs custody on October 1, 1990.

1 drum = 210 liters (or as to actual volume per verification by BIR)

Specific tax rate on additives: P4.50 per liter

COMPUTATION:

500 drums x 210 liters 
= 
 105,000 liters  
105,000 lts . x P4.50
=
 P472,500.00 specific tax due to be paid before the release from customs custody.  

All taxes due on importations of petroleum products shall be paid by the owner or importer thereof before the release of such product from customs custody.

SECTION 6.  Applicability of Petroleum Products Regulations - The provisions of Revenue Regulations No. 13-77 not inconsistent herewith, particularly in the manner of payment of specific tax, verification, recording and monitoring of production and removals and such other administrative provisions are hereby adapted to form part of these regulations.

SECTION 7.  Penalties - Any violation of these regulations shall be subject to the pertinent penalties prescribed under Title X of the National Internal Revenue Code, as amended

SECTION 8. Effectivity - These regulations shall take effect upon approval.

Adopted: 3 Oct. 1990

(SGD.) JESUS P. ESTANISLAO
( SGD.) JOSE U. ONG

Secretary of Finance
Commissioner of Internal Revenue