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FOURTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
1 
First Regular Session 
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Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
The Constitution, Article 15, Section 4, provides: 
The family has the duty to care for its elderly members but the 
State may nlso do so through just programs of social security. (Italics 
supplied) 
Republic Act No. 7432 granted to senior citizens exemption from tl. 
of 
individual taxes 011 their income up to a certain level to be determined by the National 
Economic Development Authority (NEDA). The exemption, however, does not include the final 
twenty percent (20%) withholding tax on interest income from bank deposits. The failure to 
extend exemption to bank deposit income is a violation of the intent of the law, especially 
because most senior citizens derive a substantial proportion of their income from the interest on 
their savings and retirement benefits, which are deposited in banks. 
This bill seeks to correct this oversight by explicitly providing for the exemption of bank 
deposits of senior citizens from the withholding tax on interest income. 


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FOURTEENTH CONGRESS OF THE REPUBLIC) 
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I.,. 
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OF THE PHILIPPINES 
1 
First Regular Session 
1 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
EXEMPTING THE BANK DEPOSITS OF SENIOR CITIZENS FROM THE TWENTY 
PERCENT (20%) WITHHOLDING TAX ON INTEREST INCOME, AMENDING 
REPUBLIC ACT NO 7432 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 4 of Republic Act No. 7432 shall be amended to read as follows: 
SECTION 2. Privileges fo. the Senior Citizens. - The senior citizens shall be entitled to 
the following: 
(A) the grant of twenty percent (20%) discount from all establishments relative to 
utilization of transportation services, hotels, and similar lodging establishments, 
restaurants and recreation centers, and purchase of medicine anywhere in the country; 
Provided, that private establishments may claim cost as tax credit; 
(B) a minimum of twenty percent (20%) discount on admission fees charged by 
theaters, cinema houses and concert halls, circuses, carnivals and other similar places of 
culture, leisure, and amusement; 
(C) exemption from the payment of individual income taxes; Provided, that their 
annual taxable income does not exceed the property level as determined by the National 
Economic and Development Authority (NEDA) for that year; 
(D) exemption from training fees for socioeconomic programs undertaken by the 
OSCA as part of its work; 
(E) free medical and dental services in government establishment anywhere in the 
country, subject to guidelines to be issued by the Department of Health, the Government 
Service Insurance System (GSIS) and the Social Security System (SSS); 


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(F) to the extent practicable and feasible, the continuance of the same benefits and 
privileges given by the Government Service Insurance System (GSIS), Social Security 
System (SSS) and PAG-BIG, as the case may be, as are enjoyed by those in actual 
service; AND 
(G) EXEMPTION FROM PAYING THE WITHHOLDING TAX ON 
INTEREST INCOME FROM BANK DEPOSITS, PROVIDED HOWEVER, THAT: (1) 
THE EXEMPTION FROM PAYING THE WITHHOLDING TAX SHOULD NOT 
EXCEED SIX HUNDRED THOUSAND PESOS (P600,OOO.OO); AND (2) THE 
SENIOR CITIZEN SHOULD PRESENT TO THE MANAGER OF THE BANK, IN 
WHICH HE DEPOSITS HIS MONEY, HIS SENIOR CITIZEN’S ID AND A 
CERTIFICATE FROM THE CHIEF OF THE AGENCYFIRM FROM WHICH HE OR 
SHE RETIRED.” 
SECTION 3. Separability CZause. - If any provision, or part hereof is held invalid or 
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valid and subsisting. 
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
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SECTION 4. Repeuling Clause. - Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rule or regulation contrary to, or inconsistent 
with, the provisions of this Act is hereby repealed, modified or amended accordingly. 
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Approved, 
SECTION 5. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
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