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PRRD hikes import duty for petroleum products amid pandemic

PRRD hikes import duty for petroleum products amid pandemic
By Azer Parrocha
MANILA – President Rodrigo Duterte has issued an executive order temporarily modifying the rates of import duty on crude oil and refined petroleum products to augment government funds to address the coronavirus disease 2019 (Covid-19) health crisis.

Executive Order No. 113, signed by Duterte on May 2, temporarily imposes an additional 10 percent import duty on crude oil and refined petroleum products.

The EO invoked the Bayanihan to Heal As One Act or Republic Act No. 11469 which grants Duterte temporary emergency powers to undertake measures necessary to carry out the declared national policy to fight the pandemic.

“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 EO read.

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

The EO directs the Department of Budget and Management (DBM) to ensure that the proceeds derived from the temporary additional import duty will respond to the Covid-19 situation, including the Social Amelioration Program (SAP) and such other forms of assistance for vulnerable sectors.

The modified rates of import duty will immediately revert to zero percent as international oil prices increase, based on trigger prices indexed to oil prices in the world market, the EO said.

This, after the Department of Energy (DOE) issued a certification and the Department of Finance (DOF) has been notified that a trigger price has been reached.

The EO also provides that under the Customs Modernization and Tariff Act RA No. 10863, the President may increase existing 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 EO will take effect after publication in the Official Gazette or newspaper.

It will remain in effect until such time that Bayanihan law ceases to take effect or upon the reversion of the modified rates of import duty to zero percent, whichever is earlier.

Oil prices dropped last month due to a decrease in demand following the declaration of quarantine and lockdown measures in countries affected by the Covid-19 pandemic. (PNA)

PRRD hikes import duty for petroleum products amid pandemic PRRD hikes import duty for petroleum products amid pandemic Reviewed by AsianPolicy.Press on 11:29:00 PM Rating: 5

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