%I( i 4,. 
THIRTEENTH CONGRESS OF THE REPUBLIC 
1 
OF THE PHILIPPINES 
First Regular Session 
n 
Introduced by Senator Edgardo J. Angara 
EXPLANATORY NOTE 
The Land Reform Act was passed pursuant to the constitutional mandate 
founded on the right of landless farmers to own lands they till, and to receive a 
jdst share of the fruits of their labor. 
It is a policy measure intended to promote social equity and social justice 
wherein landowners are mandated by government to sell a portion of their land 
for redistribution upon payment of just compensation. 
The measure was passed to redress a perceived social wrong. It was never 
the intention of the law to create another social imbalance that would promote 
divisiveness. For social justice means the promotion of the well being of all the 
people- of farmers and landowners alike. 
It is therefore ironic that in the implementation of the land reform, the 
contemplated protection and recognition of the just share for the landowners did 
not actually materialize. Valuation of the land is often very low. Payment by 
government is made in instalment consisting of 30% cash and 70% in Land Bank 
bonds with a 10-year maturity period. As a result , landowners in dire need of 
cash could only sell the bond at a discounted rate ranging from 10% to 20%. In 
most cases, only the productive portions of the lands are bought, leaving the 
landowners with unproductive and undesirable portions of the land. 
To rectify this injustice, the bill proposes to exempt interest earnings on 
land bank notes paid to landowners from the payment of withholding tax to ease 
the burden on landowners. It is only through an equitable balancing of the 
interests and welfare of all affected sectors can a genuine social reform be 
achieved . 
For the foregoing reasons, the passage of this bill is earnestly sought. 
EDGXRDO J. ANGARA 


OF THE PHILIPPINES 
First Regular Session 
S E N A T E  
S.No. 1060 
U 
Introduced by Senator Edgardo J. Angara 
AN ACT 
EXEMPTING BONDS ISSUED BY THE LAND BANK OF THE PHILIPPINES 
FOR LAND ACQUISITIONS FROM PAYMENT OF THE TWENTY PERCENT 
(20%) FINAL TAX ON INTEREST INCOME, AMENDING FOR THE SAID 
PURPOSE SECTION 24 (B) (1) OF REPUBLIC ACT 8424, OTHERWISE 
KNOWN AS THE TAX REFORM ACT OF 1997. 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Declaration of Policy . - The State is mandated to establish a 
uniform and equitable rule of taxation. Towards this end, it is policy of the State 
to implement a tax policy that is suited to the social conditions of all sectors of 
the society for the purpose of accelerating economic growth and development. 
SEC. 2. Exemption from Final Tax. - Section 24 (B) (1) of the Tax Reform 
Act of 1997 is hereby amended to read as follows: 
"xxx (1) Interests, Royalties, Prizes, and Other Winnings. - A final tax 
at the rate of twenty percent (20%) is hereby imposed upon the 
amount of interest from any currency bank deposit and yield or 
any other monetary benefit from deposit substitutes and from trust 
funds and similar arrangement: PROVIDED, HOWEVER, THAT 
INTEREST EARNINGS OF BONDS ISSUED BY THE LAND BANK 
OF THE PHILIPPINES AS PAYMENT TO LANDOWNERS FOR 
LAND ACQUISITIONS PURSUANT TO THE COMPREHENSIVE 


AGRARIAN REFORM LAW SHALL BE EXEMPT FROM THE 
IMPOSITION OF FINAL WITHHOLDING TAX. xxx” 
SEC. 3. Repealing Clause. - All laws, presidential decrees, executive orders, 
rules and regulations, and any part thereof, which are inconsistent with the 
provisions of this Act, are hereby repealed or modified accordingly. 
SEC. 4. Efectivify Clause. - This Act shall take effect fifteen (15) days 
following the completion of its publication in an at least two (2) newspapers of 
general circulation. 
Adopted,