Press Releases

House agrarian reform panel approves Salceda bill for condonation of agrarian lands; House tax chair’s tax amnesty proposal for ARBs adopted

November 10th, 2022

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) committed today that the House tax panel will hear and approve the tax provisions of the committee report by the House Committee on Agrarian Reform to condone some P58 billion in agrarian reform loans, following its approval of the consolidated version of various bills on the matter today. Salceda is the principal author and sponsor of the administration version of the bill, which was adopted in full in the committee report text.

“I thank Chairman Chungalao and the Committee on Agrarian Reform for its expeditious action on the measure. On my part, I commit that the House Committee on Ways and Means will hear the tax provisions, without delay. We will have this on third reading before the end of the month. We will comply with the President’s request that we pass this measure by the end of the year,” Salceda said.

Salceda called the measure “potentially PBBM’s biggest policy achievement in 2022. It could change the game for our long-suffering and long-stagnating rural communities.”

Salceda argued that the CARP needs a “major shakeup and this landmark measure might just be it.”

Salceda cited that “CARP without adequate support services and with limited capital or entrepreneurship among farmer-beneficiaries is shown to have reduced agricultural productivity in CARP lands by as much as −34.1% compared to baseline. This has resulted in almost P418 billion in lost productivity for all CARP lands every year (for the 10.3 million hectares of CARP land).”

“CARP without adequate support services and with limited capital or entrepreneurship among farmer-beneficiaries is shown to have reduced agricultural productivity in CARP lands by as much as −34.1% compared to baseline. This has resulted in almost P418 billion in lost productivity for all CARP lands every year (for the 10.3 million hectares of CARP land).”

Salceda adds that “Condonation of ARB debts could result in increase in productivity of between 23.8% (as the market can now allocate the land more efficiently) and 38.3% if productivity-enhancing interventions are increased (which the bill proposes) among the lands condoned.”

Salceda, who objected to proposals to ban mortgaging of the emancipated lands, said that the proposal could unlock as much as P472 billion in credit and P629 billion in productivity gains in agriculture.

Gross value added in agriculture could also increase by as much as P174 billion “as lands would be available towards their best use.”

Tax amnesty for ARBs

Salceda’s proposal for a tax amnesty as an incentive for those who have paid part of their amortizations, until June 30, 2025. The House tax panel chair expects the measure to yield P6.1 billion in additional estate tax collections every year due to the proposal.

“I think this is a crucial provision because these lands tend to be idle or in disuse. They’re not earning much. So, the ARB decedents who will inherit these might not have the resources to pay the estate tax on these lands. That will prevent titling, credit access, and proper use,” Salceda explained.

Salceda adds that immediate resolution of pending estates through the amnesty will “front-load the productivity gains due to this landmark measure.”

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