THIRTEENTH CONGRESS OF THE REPUBLIC 
Second Regular Session 
OF THE PHILIPPINES 
Introduced by Senator S. R. Osrneiia Ill 
EXPLANATORY NOTE 
In 1988, the enactment of Republic Act No. 6657 established the 
Comprehensive Agrarian Reform Program (CARP). The CARP is primarily a social 
reform measure and a poverty alleviation program. It seeks a redistribution of wealth, 
a more equitable distribution of land ownership and to place units of production (i.e. 
land) under the ownership and control of small farmers (tenants, leaseholders, etc.). 
Under Section 63 of the same law, the Agrarian Reform Fund (ARF) was 
created to cover the cost of implementing the Comprehensive Agrarian Reform 
Program (CARP). The initial appropriation for the ARF under the said law was fifty 
billion pesos. 
Over the years, CARP’s dwindling financial resources as reflected in 
ARF’s ballooning deficit posed much uncertainty and severe constraints on the 
genuine implementation of the CARP, 
To finance the deficit in CARP funding, there is a need to generate other 
sources to sustain the implementation of the program. One possible source of funding 
is the imposition of a Progressive Agricultural Land Tax (PALT), which is 
complementary to the attainment of CARP’s objective. 
Consistent with the constitutional mandate for a progressive system of taxation, 
a progressive land tax operates on the principle that the bigger the size of the 
landholding, the heavier the tax burden should be. Aside from generating additional 
revenue in the short run, the PALT would encourage dispersal of land ownership and 
discourage land speculation and/or land-banking by speculative investors. 
In view of the foregoing, early passage of this bill is earnestly requested 
SERGIO OSMENA 111 
Senator 


THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
Second Regular Session 
S E N A T E  
s. No. 
Introduced by Senator S. R. OsmeAa Ill 
AN ACT 
IMPOSING A PROGRESIVE TAX ON ALL PRIVATE AGRICULTURAL LANDS 
Be it enacted by the Senate and the House of Representatives of the Republic of the 
Philippines in Congress assembled: 
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SECTION 1. Coverage and lmposifion of the Tax - There is hereby 
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imposed a progressive tax in addition to the basic real property tax, on all 
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private agricultural lands, which have already been subjected to the 
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Comprehensive Agrarian Reform Program (CARP). 
SEC. 2. Exemption from the tax - The following shall be exempted from 
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the payment of the progressive land tax: 
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(a) private agricultural lands seven (7) hectares or less; 
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(b) corporate farms which have distributed shares of stocks to individual 
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farm worker-beneficiaries in accordance with Section 31 of Republic 
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Act No. 6657, otherwise known as the Comprehensive Agrarian 
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Reform Law; and 
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(c) banks, quasi-banks, other financial institutions, and cooperatives, with 
regard to the foreclosed agricultural lands while held by them. 
SEC. 3. Base and Rate of the Tax - The progressive land tax shall be 
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based on the assessed value of the agricultural landholding of a person within a 
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municipality or city as determined by the Municipal and/or City Assessor. The 


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rates of tax ranging from 1% to 3% shall be applied thereon depending on land 
size brackets as follows: 
Land Size (In hectares) 
Tax Rate 
7 or less 
Exempt 
Over 7 to 25 
1 Yo 
Over 25 to 75 
2% 
Over 75 
3 Yo 
SEC. 4. Computation of the Tax - The progressive land tax shall be 
computed by using the cumulative method. The total liability of the taxpayer 
shall be the sum of the tax computed in each of the land-size brackets within a 
city or municipality. 
SEC. 5. Administration of the Tax - The Municipal and/or City Assessor 
shall aggregate agricultural lands owned by a person together with the 
corresponding average market/assessed value within his jurisdiction. 
From the aggregate data the City and/or Municipal Assessor shall 
prepare the distribution of land hectarage by land size brackets and by tax rates 
as provided for in Section 3 of this Act. The average assessed values 
established by the City and/or Municipal Assessor shall be applied to the 
distribution of land hectarage to determine the assessed value, which shall 
serve as the basis in computing the tax. 
SEC. 6. Collection of the Tax - The progressive land tax shall be 
collected in the same manner as the basic real property tax. Its collection shall 
be the primary responsibility of the City and/or Municipal Treasurer. 
SEC. 7. Distribution of Proceeds - The proceeds of the progressive land 
tax shall be shared between the national government and the administering 
local units as follows: 
80% shall accrue to the Agrarian Reform Fund; and 
20% shall accrue to the respective city or municipality. 


SEC. 8. Rules and Regulations 
-- 
The Department of Finance in 
coordination with the Department of Agrarian Reform shall promulgate the 
necessary rules and regulations for the effective implementation of this Act. 
SEC. 9. 
Repealing Clause -- All laws, decrees, orders, rules and 
regulations, or parts thereof inconsistent with the provisions of this Act are 
hereby repealed or modified accordingly. 
SEC. I O .  Effecfivify Clause -- This Act shall take effect fifteen (1 5) days 
following its publication in at least two (2) newspapers of general circulation. 
Approved,