HOUSE OF REPRESENTATIVES
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House of Representatives
Quezon City, Metro Manila

UNIT
EX SERVICE

Seventeenth Congress
First Regular Session

House Bill No. 3187

Introduced by Representatives Dakila Carlo E. Cua and Pantaleon D. Alvarez

EXPLANATORY NOTE

The power of eminent domain was enshrined under the 1987 Philippine
Constitution which provides that private property shall not be taken for public use without
just compensation. Also called as the power of expropriation, eminent domain is
described to be the highest and most exact idea of property remaining in the government
that may be acquired for some public purpose through a method in the nature of a
compulsory sale to the State

To validly exercise the power of expropriation, the expropriator must meet the
following elements: (1) the taking of private property; (2) the taking must be for public
purpose; and (3) there must be just compensation.

Just compensation has been described as the just and complete equivalent of the
loss which the owner of the thing expropriated has to suffer by reason of expropriation

This bill then seeks to mandate the government, in the exercise of its power of
eminent domain, to pay the compulsory seller of the real property the just compensation
and the amount of capital gains tax due on the said transaction. To give justice for the
material impairment of the property, the additional amount comprising the capital gains
tax due would somehow indemnify the real property owner.

Pantaleon D. Alvare
1st District, Davao Del

Lone Dfstrict, Province of Quirino


House of Representatives
Quezon City, Metro Manila

Seventeenth Congress
First Regular Session

House Bill No. 3187

Introduced by Representatives Dakila Carlo E. Cua and Pantaleon D. Alvarez

AN ACT MANDATING THE GOVERNMENT TO PROVIDE FOR AN
ADDITIONAL AMOUNT OF CAPITAL GAINS TAX DUE IN THE JUST
COMPENSATION FOR THE SALE OF PROPERTY IN THE EXERCISE OF THE
STATE'S POWER OF EMINENT DOMAIN, AMENDING FOR THE PURPOSE SECTION
24 (D) OF REPUBLIC ACT NO. 8424, AS AMENDED, OTHERWISE KNOWN AS THE
NATIONAL INTERNAL REVENUE OF 1997

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled.

SECTION 1. Section 24(D) of Republic Act No. 8424, as amended, otherwise
known as the National Internal Revenue Code of 1997, is hereby further amended to read
as follows:

"SEC. 24. X XX. —

(A) XXX

(B)XXX

(C)XXX

(D) Capital Gains from Sale of Real Property. —

(1) In General. = x x x

(2) Exception. — (1) x xx


(3) JUST COMPENSATION IN THE EXERCISE OF POWER OF EMINENT
DOMAIN — THE GOVERNMENT SHALL, IN THE EXERCISE OF ITS POWER OF
EMINENT DOMAIN, PAY THE COMPULSORY SELLER OF THE REAL PROPERTY
THE JUST COMPENSATION AND THE AMOUNT OF CAPITAL GAINS TAX DUE ON
THE SAID TRANSACTION.”

SEC. 2. Rules and Regulations. The Secretary of Finance shall, upon the
recommendation of the Commissioner of Internal Revenue, within sixty (60) days,
promulgate the necessary rules and regulations to faithfully implement the intent and the
provisions of this Act: Provided, That the failure of the Secretary of Finance to promulgate
the said rules and regulations shall not prevent the implementation of this Act upon its
effectivity.

SEC. 3. Repealing Clause. — All laws, rules and regulations which are inconsistent
with this Act are hereby repealed, amended or modified accordingly

SEC. 4. Effectivity Clause. — This Act shall take effect fifteen (15) days after its
publication in any newspaper of general circulation

Approved,