Agrarian and Land Reform

Agrarian Reform

• Land redistribution aims to uplift the economic status of landless farmers and farmworkers
• The goal is to end land ownership disputes and foster harmony between rural and urban populations
• Achieving political stability is also an objective

Land Reform

• Land reform is an integrated approach aimed at eliminating obstacles to economic and social development

Aspects of Agrarian Reform

Economic Aspect

• The Philippines relies heavily on the agricultural sector despite industrial programs
• One way to motivate farmers to increase production is to enable them to own the land they till

Socio-Cultural Aspect

• Agrarian reform shifts farmers from self-sufficiency to surplus production for sale
• It enhances social order in farmlands, encourages farmers to take on leadership roles
• Improved agricultural productivity leads to increased family incomes that enable farmers to send their children to school
• It promotes a modern outlook and family planning among farmers

Religious Aspect

• Biblical teachings inspire to the idea that land and its fruits are a divine right for everyone

Objectives of Agrarian Reform

• Agrarian Reform aims to end land ownership conflicts and bring political stability:
• It aims to bring about equality in opportunities, income, and wealth
• Agrarian reform programs primarily facilitate activities, such as land acquisition

Comprehensive Agrarian Reform (CARP)

• The CARP or Republic Act No. 6657 redistributes public and private agricultural lands to landless farmers and farmworkers
• A key component of CARP is Land Tenure Improvement, which speeds up land distribution
• Republic Act No. 6657, also known as the Comprehensive Agrarian Reform Law (CARL), serves as CARP's legal foundation
• President Corazon C. Aquino signed it on June 10, 1988

History of Agrarian Reform

• Before colonization, communities in the Philippines organized with land known as "barangay"
• Barangays consist of 30-100 families, administered by chiefs, and ensure land access and shared resources for all
• The Spanish introduced the "pueblo" agricultural system in 1521, organizing native rural communities
• Peasants and workers formed the HUKBALAHAP on March 29, 1942, as an anti-Japanese group during the Japanese occupation
• During Manuel L. Quezon's administration, RA 4054/Rice Tenancy Law legalized 50-50 crop sharing, protecting tenants from landlord abuses
• Republic Act No. 34 established a 70-30 sharing arrangement between tenant and landlord during Manuel Roxas' term
• Under Elpidio Quirino, the Land Settlement Development Corporation (LASEDECO) was established via Executive Order No. 355
  • This accelerated the government's peasant resettlement program
• President Magsaysay recognized the importance of an honest land reform program

Agrarian Reform Laws and Acts in the Philippines

• LAND REFORM ACT OF 1955 (R.A 1400)

  • Defines land tenure policy and allocates funds for implementation

• REVISED AGRICULTURAL LAND REFORM CODE (R.A 6389)

  • Abolished personal cultivation and enabled conversion to residential subdivisions
  • Automatically converted all share-tenants to leasehold tenants
  • Created the Department of Agrarian Reform
  • Grants tenants' rights on land converted to residential subdivisions
  • Increased funding for land reform
  • Credits rentals in favor of the tenant

Lands Covered by the Code

• All tenanted areas are covered by the code:
• Landed estates.
• Old and Proposed settlements.

Lands Covered by CARL

• All alienable and disposal lands of the public domain are covered by CARL
• Lands of the public domain exceeding specific terms.
• All lands owned by the government and private lands.

Qualified Beneficiaries

• Agricultural lessees and share tenants can benefit from CARL
• Includes Regular, Seasonal, and Other farmworkers.
• Actual tillers or occupants of public lands, cooperatives of beneficiaries, and others working the land directly.

Lands Outside the Coverage of CARL

• This refers to lands exempted from the Comprehensive Agrarian Reform Law

Comprehensive Agrarian Reform Program Extension with Reform (CARPER Law)

• CARPER strengthens and improves CARL
• CARPER has a 150 billion budget
• It introduces seven new and 26 reformed provisions
• The law restores compulsory acquisition and extends land distribution for five years
• CARPER balances landowner, farmer, and DAR interests
• It creates the Congressional Oversight Committee on Agrarian Reform (COCAR)

The New Constitution of the Philippines

• Constitutions are sets of fundamental principles or established precedents by which a state is governed

Purpose of the Constitution

• The constitution serves as the fundamental law of the land
• It provides the framework for government, defining the executive, legislative, and judicial branches

Philippine Constitutions

Malolos Constitution

• Written in Spanish, known as "La Constitution Politica de Malolos"
• Drafted in Malolos, Bulacan, in 1899 after declaring independence from Spain
• It was the first republican constitution in Asia

The 1935 Constitution

• Written in 1934, it was approved and adopted by the Commonwealth of the Philippines (1935-1946)
• Later used by the Third Republic of the Philippines (1946-1972)
• It was written to ensure U.S. support for Philippine independence

The 1943 Constitution

• Provided strong executive powers and a National Assembly composed of those considered anti-US
• Premier Hideki Tojo promised Filipinos independence; the constitution was for a republic under Japanese occupation
• It was limited in duration and provided for indirect elections and a strong executive branch

The 1973 Constitution

• Ratified on January 17, 1973, it shifted the government from presidential to parliamentary
• The president was symbolic, executive power rested with the prime minister, and legislative power was with a unicameral National Assembly
• In 1976, the National Assembly was replaced through PD 1033 enacted by President Ferdinand Edralin Marcos

The 1986 Provisional Constitution

• Known as the Freedom Constitution, it was enacted by President Corazon C. Aquino on March 25, 1986
• It was provisional after the People Power Revolution
• Executive and legislative powers were with the president until a new legislature was elected/convened
• President was mandated to convene a Constitutional Commission for a new charter

Constitution of the Republic of the Philippines

• Ratified on February 2, 1987, it's the fourth fundamental law since independence on July 4, 1946
• The 1935 Constitution became operational after the Third Philippine Republic's inauguration
• The 1973 Constitution was enacted during Martial Law, becoming operational after Martial Law was lifted in 1981
• The 1986 Provisional Freedom Constitution was enacted by President Corazon C. Aquino after the People Power Revolution in 1986

History of Taxation in the Philippines

Pre-Colonial Period (900 - 1521)

• Early Filipinos had taxation systems before the Spanish

• Collected tax or tribute was called "buwis" or "handug"

• Barangay was the unit of government ruled by a "l" or "raha"

• Society had 3 tax-paying classes

  • "Tumao" class: includes datus.
  • "Timawa" class: warriors.
  • "Oripun" class: commoners and slaves.

Taxation in Spanish Philippines (1521-1898)

• Information on taxation during the Spanish period is not provided in the current document

Taxation Under Americans (1898-1935)

• 1898-1903: Americans continued with the Spanish system of taxation
• The "urbana" tax on urban real estate was replaced with a land tax for both urban and rural real estate

Civil Government

• William H. Taft (1902)

• Luke E. Wright (1904)

  • July 2, 1904: Created the Bureau of Internal Revenue (BIR) through Reorganization Act No. 1189
  • August 1, 1904: BIR was formally organized and operational

• The bureau must assess and collect all national internal revenue taxes, fees, and charges

1904: Internal Revenue Law:

- Licensed and excise taxes, taxes on banks and stamp taxes
 - Cedula, taxes on insurance companies, forest products, mining concessions
 - Taxes on business and occupational licenses

• 1907: Changes in cedula and industrial tax

• The cedula had a rate fixed per adult male/Some places could double the fee, and the industrial tax was charged

• October 3, 1913: The Underwood-Simmons Tariff Act (U.S. Pres. Woodrow Wilson with Governor-General Francis Burton Harrison) aimed to:

  • Reduce levies on manufactured and semi-manufactured goods
  • Eliminate duties on raw materials

New tax sources:

• Income tax (1914)

• Inheritance Tax (1919)

• Nov. 15, 1937: Abolition of Cedula Tax

• The National Assembly abolished the cedula tax as it burdened the poor

Taxation During the Commonwealth Period

• January 1, 1940: Imposed Residence Tax

• Every employed Filipino over 18 and every corporation were subject to residence tax

  • Exemptions included:
    • U.S. High Commissioner and staff
    • U.S. military personnel.
    • Foreign representatives/officers.
    • Visitors staying less than 3 months

• National Internal Revenue Code of 1939 enacted a new tax system during commonwealth

Japanese Regime (1942-1945)

• During WWII, the Bureau was combined with the Customs Office under a Director of Customs & Internal Revenue

Post-War Era

• On July 4, 1946, the Philippines gained independence and the Bureau was re-established separately

• Reorganization occurred on October 1, 1947, through Executive Order No. 94

  1. Merged the Accounting Unit and the Revenue Accounts and Statistical Division
  2. Consolidated all records in the Records Section under the Administrative Division
  3. Centralized all legal work in the Law Division

• Revenue Regulations No. V-2 divided the country into 31 inspection units

  • Each unit was under a Provincial Revenue Agent, except specified units led by a City Revenue Agent or supervisors

• The second major reorganization happened on January 1, 1951 through Executive Order No. 392, creating:

  1. Legal Department
  2. Assessment Department
  3. Collection Department

• Later in January, Memorandum Order No. V-188 created the Withholding Tax Unit, under the Income Tax Division of the Assessment Department

• Implementing the withholding tax system via Republic Act (RA) 690 resulted in 25% of total income tax collected

• The third major reorganization occurred on March 1, 1954, through Revenue Memorandum Order (RMO) No.41, creating:

  1. Specific Tax Division
  2. Litigation Section
  3. Processing Section
  4. Office of the City Revenue Examiner

• By September 1, 1954, RMO No. V-4 designed a training unit

• The Bureau created its first 2 Regional Offices in Cebu and Davao on July 20, 1955, per RMO No. V-536

  • Each Regional Office was headed by a Regional Director and supported by Chiefs of five branches:
    1. Tax Audit
    2. Collection
    3. Investigation
    4. Legal
    5. Administrative

• The creation of the Regional Offices divided the islands into three revenue regions

• In January 1957, the head of the Bureau changed from Collector to Commissioner

• Jose Aranas was the last Collector and first Commissioner

• A significant step in 1958 was building the Tax Census Division and corresponding Tax Census Units for each Regional Office

  • This consolidated all statements of assets, incomes, and liabilities of all individuals and resident corporations into a National Tax Census

• To enforce tax payments strictly and discourage tax evasion, RA No. 233 (the Rewards Law) was enacted on June 19, 1959

  • Informers that reported tax evaders were rewarded 25% of the revenue collected

• In 1964, the Philippines was re-divided into 15 regions and 72 inspection districts

• The Tobacco Inspection Board and Accountable Forms Committee were also created under the Office of the Commissioner

Marcos Administration

• Misael Vera was appointed Commissioner in 1965 and led the Bureau "new direction" for tax administration

• This included to the Blue Master Program and Voluntary Tax Compliance Program

  • Curb tax payer abuses/ BIR personnel's, while the second encouraged professional to report true amount of taxes

• The Tax Account Number (TAN) provided each taxpayer in 1970 Assisted in taxpayer's identification, which led to faster verification of tax records/payment of taxes through banks(per Executive Order No.206)

• The proclamation of Martial Law on September 21, 1972, lead to new society with new approach for the the developmental efforts

• Several tax amnesty decrees of the president was promulgated to enable erring taxpayers to start again The Bureau went through changes during the Martial Law period (1972-1980)

• In 1976, Under Commissioner Efren Plana's administration, the Bureau's National Office transferred to its own building in Quezon City, inaugurated on June 3, 1977

• The National Internal Revenue Code of 1977 was promulgated in the same year, which updated the 1934 Tax Code

• The Bureau was further reorganized on August 1, 1980 under Commissioner Ruben Ancheta

• New offices were created and some units were relocated, so the Bureau could be more responsive to the public

Taxation

• Taxation regarded as "the lifeblood of any state."

• The inherent state power to impose and collect revenues for government support

• Taxes ought to be enforced contributions which must be paid in legal tender

• Taxes are proportionate to the ability to pay. They may be imposed on acts, transactions, or contracts

• Taxes are imposed by the law-making body for public purposes

Tax

• A tax refers to a fixed amount imposed on individuals within a specified area

Kinds of Taxes

Direct Taxes

• Paid directly by the taxpayer.
  • Capital gains tax: Imposed when an asset is sold at a higher price
  • Withholding tax: Money deducted from an employee's wages paid to the government
  • Income tax: Imposed on annual profits individuals generate from various sources
  • Donors tax: Applies when property is transferred generously
  • Estate tax: Imposed on the total value of a deceased individual's assets and properties

Indirect Taxes

• Paid by the taxpayer but can be passed on to others.
• Imposed on consumer goods
• Value added tax (VAT): Tax levied on each stage of production/distribution.
• Excise tax: Imposed on manufacturer/importer, but passed on to consumer.
• Documentary stamp tax: Tax levied on documents related to transfer of property or financial obligations

The Four Canons of Good Taxation

• Equity: must be based on ability to pay
• Certainty: the amount and manner of payment must be clear
• Convenience: Payments should not be oppressive
• Economy: Tax should be enough to sustain the government

Three Phases of Taxation

• Levy/imposition involves the impact of taxation, free to select properties/persons
• Assessment/collection: the basis and guidelines on the assessment are laid down by authorities responsible
• Payment is known as the the incidence of taxation