Maria Veronica Pangilinan

Manager, Card Sales

December 29, 2017

Dear Valued StarCard Customer:

We wish to inform you about the upcoming changes on the excise tax for petroleum products. The “Tax Reform
for Acceleration and Inclusion” (TRAIN or Republic Act No. 10963) has been signed into law that, among others,
increases the excise tax rates on petroleum products for 2018, 2019, and 2020, as follows:

Product Current Rate New Excise Tax New Excise Tax New Excise Tax
Rate Rate 1/1/2019 Rate 1/1/2020
1/1/2018
Gasoline 4.35 7.00 9.00 10.00
Kerosene -0- 3.00 4.00 5.00
Diesel -0- 2.50 4.50 6.00
Lubricants 4.50 8.00 9.00 10.00

Since its publication in the Official Gazette last December 27, 2017, the TRAIN law shall take effect starting
January 1, 2018. In view of this, we are providing this information so you could anticipate these changes and
work on your current processes within your business to cover the said increase in taxes.

Rest assured that Chevron Philippines Inc. is fully committed to reliably provide its customers with quality
products that are competitively-priced in the market.

Kindly monitor your e-mails for other details which will be sent to you for your perusal. Please feel free to reach
out to April King, your Area Sales Manager, at 0918 801 5086 if you have any questions.

Sincerely,

Maria Veronica Pangilinan

attachment: FAQ Sheet for TRAIN

Frequently Asked Questions on TRAIN:

Chevron Philippines Inc.

6th Floor, 6750 Building, Ayala Avenue, Makati City 1226
Tel 63 2 8411019 Mobile 63 918 8015016 Fax 63 2 841 1092
Email
 Maria Veronica Pangilinan
Manager, Card Sales

What is the TRAIN?

Tax Reform for Acceleration and Inclusion (TRAIN) is the first package of the comprehensive tax reform program
envisioned by President Duterte’s administration, which seeks to amend existing provisions of the National
Internal Revenue Code of 1997 for the purpose of generating more revenues. It is also intended to correct a
number of deficiencies in the tax system to make it simpler, fairer, and more efficient.

The main features of the law are as follows (for the e-mail version of this correspondence, hover your pointer on
each item and press CTRL then click):

Lowering the Personal Income Tax (PIT)

Simplifying the Estate and Donor's Tax\
Expanding the Value-Added Tax (VAT) Base
Increasing the Excise Tax of Petroleum Products
Increasing the Excise Tax of Automobiles
Introducing the Tax of Sugar-Sweetened Beverages

When will the law take effect?

The law shall take effect on January 1, 2018 since its publication in the Official Gazette last December 27, 2017;
this is a mandatory requirement before the law could be enforced.

What are the new excise taxes on fuel products?

The TRAIN provides for staggered increases in excise tax rates from 2018 to 2020. Below are the some of the
fuel products, current and new excise tax rates for these years:

Product Current Rate New Excise Tax New Excise Tax New Excise Tax
Rate Rate 1/1/2019 Rate 1/1/2020
1/1/2018
Gasoline 4.35 7.00 9.00 10.00
Kerosene -0- 3.00 4.00 5.00
Diesel -0- 2.50 4.50 6.00
Lubricants 4.50 8.00 9.00 10.00

When is the excise tax on fuel paid?

a) For imported fuel products – Upon importation
b) For refined fuel products – Upon withdrawal from the refinery

Will Chevron Philippines Inc. (CPI) benefit from TRAIN?

This is a government initiative that aims to increase tax revenues, CPI will remit all the taxes collected to the national
government.

How does the new law impact CPI and the prices and quality of its products?
CPI remains fully committed to reliably provide its customers with high-quality products that are competitively-priced
in the market.

Chevron Philippines Inc.

6th Floor, 6750 Building, Ayala Avenue, Makati City 1226
Tel 63 2 8411019 Mobile 63 918 8015016 Fax 63 2 841 1092
Email