Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

THIRTEENTH CONGRESS
First Regular Session

113

H. No.

Introduced by Hon. Juan Edgardo “Sonny” M. 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
just 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.

Pov Btdy__

JUAN EDGARDO “ z INNY” M. ANGARA


THIRTEENTH CONGRESS OF THE REPUBLIC }

OF THE PHILIPPINES )
First Regular Session }
HOUSE OF REPRESENTATIVES.
3
H.No. dl

Introduced by Rep. Juan Edgardo “Sonny” M. 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. Repeating 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. Effectivity 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,