Agrarian Reform and

Taxation in the Philippines

Agrarian Reform in the
Philippines
Agrarian reform Defined
The transfer of control and ownership of agricultural land
to the actual tillers.

LAND REFORM vs. AGRARIAN REFORM

Land Reform
Improvement of the farmers relationship to the land that
they cultivate.
Agrarian Reform
Concerned is the total development of farmers on
economic, social and political transformation.
 HISTORY OF AGRARIAN REFORM IN
THE PHILIPPINES

By the Spanish
Land during the Spanish Era were owned and controlled
by the friars. The land distribution was done in the form
of rewards to the peasants because of their loyalty and
faithful to the Spanish officials.
By the Americans
Land that owned by the Friars were sold to those families
who can afford to buy big tracts of lands which later on
became haciendas.
Macapagal Administration
Agricultural Land Reform Code (RA 3844) was a major
advancement of land reform in the Philippines and was
enacted in 1963 under President Diosdado Macapagal.
It abolished tenancy and established a leasehold system in
which farmers paid fixed rentals to landlords, rather than a
percentage of harvest.
It also established the Land Bank of the Philippines to help
with land reform, particularly the purchase of agricultural
estates for division and resale to small landholders, and the
purchase of land by the agricultural lessee.
Marcos Administration
The Agricultural Land Reform Code becomes Code of
Agrarian Reform under RA.6389 in 1971

C. Aquino Administration
Implementation of Comprehensive Agrarian Reform
Program as stated in RA.6657
 COMPREHENSIVE AGRARIAN
REFORM PROGRAM
▪ It is the redistribution of lands, regardless of crops or
fruits produced, to farmers and regular farm workers who
are landless, irrespective of tenurial arrangement, to include
to totality of factors and support services designed to lift
the economic status of the beneficiaries and all other
arrangements alternative to the physical redistribution of
lands, such as production or profit-sharing, labor
administration, and the distribution of shares of stock
which will allow beneficiaries to receive a just share of the
fruits of the lands they work.
Comprehensive Agrarian Reform Law
Republic Act No. 6657, called Comprehensive Agrarian
Reform Law was signed by Pres. Corazon Aquino on June 10,
1988. The Comprehensive Agrarian Reform Law is
responsible for the implementation of the Comprehensive
Agrarian Reform Program (CARP).
Scope of Agrarian Reform
All public and private agricultural lands as provided in
Proclamation No.131 (Instituting a Comprehensive Agrarian
Reform Program) and executive order No. 229
(Implementation of CARP), including other lands of the
public domain suitable for agriculture.
Schedule of Implementation
The distribution of all lands covered by this Act shall be
implemented immediately and completed within ten (10) years
from the effectivity.
Salient or noticeable featured of CARP
▪ Coverage
▪ Retention limits
▪ Schedule or priorities
▪ Beneficiaries
▪ Exclusion – exemption and deferment
▪ Administrative and financial requirements of the program
Retention limit
▪ Set a five hectares plus three hectares for each qualified
child of the landlord.
▪ Qualified child – means that he/she must be at least 15
years old as of June 15, 1988 and directly involved in tilling
or “managing” the farm in question.
▪ The right to choose the area to be retained, which shall be
compact or contiguous, shall pertain, to the landowner:
Provided, however, that is case the area selected for
retention by the landowner is tenanted, the tenant shall have
the option to choose whether to remain therein or be a
beneficiary in the same or another agricultural land with
similar or comparable features.
 THE PROGRAM IS DEVIDED INTO
THREE PHASES:

PHASE 1
Covers around 1.45 million hectares was to be devoted
to the completion of the Marcos land reform, the
reform of idle and abandoned lands, and lands
voluntarily offered for sale the owners, and the reform
of states foreclosed by government financial
institutions and those acquired by the Presidential
Commission on Good Government (PCGG).
PHASE 2
Covers about 7.4 million hectares was to be devoted to
reforming all public agricultural lands to be opened for new
development and resettlement, as well as private land 50
hectares and above.
PHASE 3
▪ Divided into two –sub phases and has a combines coverage
of 1.35 million hectares
▪ Phase 3-A was supposed to cover private agricultural lands
of 24 to 50 hectares
▪ Phase 3-B is supposed to cover private farmlands of areas
above the retention limit up to 24 hectares
The program has different modes of land acquisition
and redistribution
▪ For public lands, which comprise more than half of the
target land reform, distribution is done through either Free
Patents for Alienable and Disposable (A & D) lands,
Certificates od Land Ownership Awards (CLOAs)
▪ For resettlement sites, or stewardship contracts for public
lands covered by the integrated Social Forestry program
(ISFP)
FOR PRIVATE LANDS
▪ Compulsory acquisition (CA) is the main mode to be used in
expropriating land whose owners did not voluntary offer them
for land reform
▪ CARP was originally conceived to need around p221 billion
which covers both the land acquisition cost and the package of
support infrastructure, both physical and social
▪ CARP defers land redistribution of commercial farms, defined as
private lands over five hectares devoted to livestock, poultry,
aquaculture including salt beds. Fishponds are prawn farms, fruit
farms, orchards, vegetable and cut-flower farms, and cacao,
coffee and rubber plantations. These will be subject to
expropriation only after 10 years from June 15, 1988
Exemptions and Exclusions
Lands actually, directly and exclusively used for parks,
wildlife, forest reserves, reforestation, fish sanctuaries and
breeding grounds, watersheds and mangroves shall be exempt
from coverage of this Act.

Distribution Limit
No qualified beneficiary may own more than three (3)
hectares of agricultural land.
Transferability of Awarded Lands
Lands acquired by beneficiaries under this act may not be
sold, transferred or conveyed except through hereditary
succession, or to the government, or to the LBP, or to other
qualifies beneficiaries for a period of ten (10) years: provided,
however, that the children or the spouse of the transfer shall
have a right to repurchase the land from the government or
LBP within a period of two (2) years. Due notice of the
availability of the land shall be given by LBP to the Barangay
Agrarian Reform Committee (BARC) of the barangay where
the land is situated. The provincial Agrarian Coordinating
Committee (PARCCOM), as herein provided, shall, in turn,
be given due notice thereof by the BARC.
The Presidential Agrarian Reform Council
The Presidential Agrarian Reform Council (PARC) shall be
composed of the President of the Philippines as Chairman, the
Secretary of Agrarian Reform as Vice-Chairman and the following
as members: Secretaries of the Departments of Agriculture;
Environment and Natural Resources; Budget and Management;
Local Government; Public Works and Highways; Trade and
industry; Finance; Labor and Employment; Director-General of
the National Economic and Development Authority; President,
Land Bank of the Philippines; Administrator, National Irrigation
Administration; and three (3) representative of affected
landowners to represent Luzon, Visayas and Mindanao: Provided,
that one of them shall be from the cultural communities.
COMPREHENSIVE AGRARIAN REFORM
PROGRAM TODAY
▪ Lands are still need to be distributed and at present, the
government is still implementing its program by the
implementation on CARPER
▪ According to CARPER or Comprehensive Agrarian
Reform Program with Extension Reform (RA 9700), the
welfare of the landless farmers and farmworkers will
receive the highest consideration to promote social justice
and to move the nation toward sound rural development
and industrialization, and the establishment of owner
cultivator ship of economic-size farms as the basis of
Philippine agriculture.
TERMINOLOGIES
Farmers – it refers to a natural person whose primary
concern or livelihood is cultivation of land or the
production of agricultural crops, either by himself, or
primarily with the assistance of his immediate farm
household, whether the land is owned by him, or by another
person under leasehold or shared tenancy agreement or
arrangement with the owner thereof.
Farm Worker – a natural person who renders service for
value as an employee or labor in agricultural land enterprise
or farm regardless of whether his compensation is paid on a
daily, weekly, monthly or pakyaw basis.
Regular Farm worker – also a natural person who is
employed on a permanent basis by an agricultural enterprise
or farm.

Seasonal Farm worker – a natural person who is employed

on recurrent, periodic, or intermittent basis by and
agricultural enterprise.

Other Farm worker – is a farm worker who does not fall

under any farm workers mentioned above.
Taxation in the Philippines
Objectives:
At the end of this lecture, the students shall be able to:

▪ Define taxation.
▪ Discuss the purposes of taxation.
▪ Identify the theory and basis of taxation.
▪ Describe the principles of a sound tax system.
▪ List the nature of taxation.
▪ Explain the limitations of taxation (constitutional and
inherent)

▪ Identify the aspects of taxation.

 What is taxation?

▪ Taxation is the process or means by which the

sovereign, through its lawmaking body, raises income
to defray the necessary expenses of the government.
 Purpose of taxation

Primary purpose
▪ To provide funds or property with which to promote
the general welfare of its citizens and to enable it to
finance its multifarious activities.
 Purpose of taxation

Secondary purposes
▪ To strengthen anemic enterprises by giving tax
exemptions.
▪ To protect local industries against foreign
competition through imposition of high customs
duties on imported goods.
 Purpose of taxation

Secondary purposes
▪ To reduce inequalities in wealth and income by
imposing progressively higher taxes.
▪ To prevent inflation by increasing taxes or ward off
depression by decreasing taxes.
 Theory and Basis of Taxation

Theory
▪ The existence of the government is a necessity.
▪ The government cannot continue without a means to
pay its expenses.
▪ The government has the rights to compel its citizens
and property within its limits to contribute.
 Theory and Basis of Taxation

Basis
▪ Taxation is based on the reciprocal duties of
protection and support between the government
and its people.
▪ Government receives taxes from the people which is
used to perform functions of government and other
benefits.
▪ Benefit-received theory.
 Basic principles of sound tax system

• Fiscal adequacy
• Equality or theoretical justice
• Administrative feasibility
 Fiscal adequacy

▪ The source of government revenue should be

efficient to demand the needs of public
expenditure.
▪ Creating new taxes or new tax machinery or by
merely changing the rates applicable to existing taxes.
 Equality or theoretical justice

▪ The tax burden should be proportionate to the

taxpayer’s ability to pay.
▪ Ability-to-pay principle.
 Administrative feasibility

The tax laws should be capable of convenient, just and

effective administration.
Each tax should be:
▪ Clear and plain to the taxpayer.
▪ Capable of uniform enforcement
▪ Convenient as to time, place and manner of payment.
▪ Not unduly burdensome upon or discouraging to business
activity
 Nature of Taxation

▪ It is inherent in sovereignty.
▪ Legislative in character.
▪ Subject to constitutional and inherent limitations.
 Limitations of Taxation

▪ Inherent limitations – restrictions on the power

exists from the very nature of the power of
taxation itself.
▪ Constitutional limitations – restrictions in the
exercise of the power of taxation as expressly
provided in the Philippine Constitution.
 Constitutional limitations

▪ Due process.
▪ Equal protection of the laws.
▪ Rule of uniformity and equity in taxation.
▪ Non-imprisonment for non-payment of poll tax.
▪ Non-impairment of the obligations and contracts.
▪ Non-infringement of religious freedom.
 Constitutional limitations

▪ No appropriation for religious purposes.

▪ Exemption of religious, charitable or educational
entities, non-profit cemeteries, and churches from
taxation.
▪ Exemption of revenues and assets of non- stock,
non-profit educational institutions and donations for
educational purposes from taxation.
 Constitutional limitations

▪ Concurrence by a majority of all members of the

Congress for the passage of a law granting any tax
exemption.
▪ Power of the President to veto any particular item
or items in a revenue or tariff bill.
▪ Non-impairment of the jurisdiction of the Supreme
Court in tax cases.
 Inherent limitations

Requirement that levy must be for a public purpose.

Non-delegation of the legislative power to tax, except:
▪ Delegation to the President
▪ Delegation to local governments
▪ Delegation to administrative bodies
 Inherent limitations

▪ Exemption from taxation of government entities.

▪ International comity
▪ Territorial jurisdiction
 Aspects of taxation

Levy – deals with the provisions of law which

determines:
▪ The person or property to be taxed
▪ The sum or sums to be raised
▪ The rate of the tax
▪ The time and manner of levying, receiving and
collection the tax.
 Aspects of taxation

▪ Collections – constituted of the provisions of law

which prescribe the manner of enforcing the
obligation on the part of those taxes to pay the
demand thus created.