Gov’t hikes import duty for petroleum products by 10 percent

Published May 4, 2020, 12:00 AM

by manilabulletin_admin

 

By Genalyn Kabiling

The government will temporarily impose an additional 10 percent import duty on crude oil and refined petroleum products to raise funds for its programs to respond to the coronavirus pandemic.

President Duterte has issued Executive Order No. 113 temporarily modifying the rates of import duty of petroleum products listed under the country’s tariff law.

Under the EO, the President said crude oil and refined petroleum products will be “subject to an additional import duty of ten percent (10 percent) on top of their existing Most Favored Nation (MFN) and preferential import duties.”

“There is an urgent need to augment the Government’s resources to sufficiently finance the programs and measures to mitigate the effects of the COVID-19 situation and launch the country towards recovery and rehabilitation,” the order read.

The President also directed the Department of Budget and Management (DBM) to ensure the proceeds from the extra oil import duty will be used for programs that will address the effects of the COVID-19 situation, including the social amelioration program and other forms of assistance for affected sectors.

Under EO, the modified rates on petroleum products will revert to zero percent as international oil prices increased based on the trigger prices indexed to oil prices in the world market.

The Department of Energy must issue a certification that a trigger price has been reached and the Department of Finance has been notified about the matter. The Bureau of Customs will then issue the corresponding memorandum order to effect the reversion.

Global oil prices have dropped in recent weeks as demand weakened due to the lockdown measures across many countries.

The latest presidential directive has invoked Republic Act No. 11469 that grants the President temporary emergency powers to undress measures reasonable and necessary to implement the national policy avians the coronavirus.

EO 113 also mentioned that Under Republic Act No. 10863 or the Customs Modernization and Tariff Act, the President may increase rates of import duty and impose additional duty on all imports not exceeding 10 percent in the interest of general welfare and national security.

The order, signed by the President last May 2, will take effect immediately after publication in the Official Gazette or newspaper. It will remain enforceable until such time RA 11469 ceases to take effect or upon the reversion of the modified rates of import duty to zero percent whichever is earlier.

 

 
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