Presidential
Decree No. 529
GRANTING TO PETROLEUM
EXPLORATION CONCESSIONAIRES UNDER THE
PETROLEUM ACT OF 1949
EXEMPTION FROM CUSTOMS DUTY AND COMPENSATING TAX ON IMPORTATIONS OF MACHINERY
AND EQUIPMENT, SPARE PARTS AND MATERIALS REQUIRED FOR THEIR EXPLORATION
OPERATIONS
WHEREAS,
in line with the policy of the government to promote and hasten the discovery and
development of the country’s indigenous petroleum resources, adequate
incentives are granted to those who are engaged or will engage in the search
and exploration of oil in this country;
WHEREAS,
under
Presidential Decree No. 87, contractors entering into
service contracts for petroleum exploration and development with the government
are allowed exemption from payment of customs duty and compensating tax on
imported machinery, equipment and other materials used in their exploration
activities;
WHEREAS,
to further bolster domestic petroleum exploration, it is desirable that similar
duty/tax exemption should also be given to holders of petroleum exploration
concessions under
Republic Act No. 387 otherwise known as
the
Petroleum Act of 1949;
NOW,
THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of
the powers vested in me by the Constitution, do hereby decree and order that
petroleum exploration concessionaires under
Republic Act
No. 387, also known as the
Petroleum Act of 1949 be
exempted from the payment of customs duty and compensating tax on importations
of machinery and equipment, spare parts and materials required for petroleum
exploration operations subject to the conditions that said machinery equipment,
spare parts and materials of comparable price and quality are not manufactured
domestically; are directly and actually needed and will be used exclusively by
the concessionaire in its operations or in operations for it by a contractor or
a subcontractor; are covered by shipping documents in the name of the
concessionaire to whom the shipment will be delivered direct by the customs
authorities; and the prior approval of the Petroleum Board was obtained by the
concessionaire before the importation of such machinery, equipment, spare parts
and materials which approval shall not be unreasonably withheld: Provided,
however, That the concessionaire or its contractor or subcontractor may not
sell, transfer, export or otherwise dispose of these machinery, equipment,
spare parts and materials without the prior approval of the
Petroleum Board and
payment of duties and taxes due to the Government: Provided,
further, That should the concessionaire or its contractor or subcontractor
sell, transfer, export or dispose of these machinery, equipment, spare parts or
materials without prior consent of the Petroleum Board, it shall pay twice the
amount of the tax exemption granted: Provided, finally, That the
Petroleum
Board shall allow and approve the sale, transfer, or disposition of the said
items without tax if made (1) to another concessionaire or contractor under
Presidential Decree No. 87; (2) for reasons of technical
obsolescence; or (3) for purposes of replacement to improve and/or expand the
operations of the contract;
All
laws, or provisions of law, rules, orders or regulations inconsistent herewith
are hereby repealed or modified accordingly.
This
Decree shall take effect immediately.
Done
in the City of
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