FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
,'UL 21 
I" i. 'n2' 
1-. • 
SEN';\'T"E 
S, No, lti48 
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 also do 
so through just programs of social security. (Italics supplied) 
Republic Act No, 7432 granted to senior citizens exemption from the payment of 
individual taxes based on 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, 1 
I This bill was originally filed during the Fourteenth Cougress, First Regular session. 
1 


FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
£ENf1f48 
S. No. ___ -=--
Introduced by Senator Miriam Defensor Santiago 
I 
AN ACT 
2 
EXEMPTING THE BANK DEPOSITS OF SENIOR CITIZENS FROM THE 
3 
TWENTY PERCENT (20%) WITHHOLDING TAX ON INTEREST INCOME, 
4 
AMENDING REPUBLIC ACT NO 7432 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
5 
SECTION 1. Section 4 of Republic Act No. 7432 shall be amended to read as 
6 
follows: 
7 
SECTION 4. Privileges for the Senior Citizens. - The senior citizens 
8 
shall be entitled to the following: 
9 
(A)' the grant of twenty percent (20%) discount from all establishments 
10 
relative to utilization of transportation services, hotels, and similar lodging 
11 
establishments, restaurants and recreation centers, and purchase of medicine 
12 
anywhere in the country; Provided, that private establishments may claim cost 
13 
as tax credit; 
14 
(B) a minimum of twenty percent (20%) discount on admission fees charged 
15 
by theaters, cinema houses and concert halls, circuses, carnivals and other 
16 
similar places of culture, leisure, and amusement; 
17 
(C) exemption from the payment of individual income taxes; Provided, that 
18 
their aunual taxable income does not exceed the property level as determined 
19 
by the National Economic and Development Authority (NEDA) for that year; 
20 
(D) exemption from training fees for socioeconomic programs undertaken by 
21 
the OSCA as part of its work; 
22 
(E) free medical and dental services in government establishment anywhere in 
23 
the country, subject to guidelines to be issued by the Department of Health, 
1 


1 
the Government Service Insurance System (GSIS) and the Social Security 
2 
System (SSS); 
3 
(F) to the extent practicable and feasible, the continuance of the same benefits 
4 
and 'privileges given by the Government Service Insurance System (GSIS), 
5 
Social Security System (SSS) and P AG-BIG, as the case may be, as are 
6 
enjoyed by those in actual service; AND (G) EXEMPTION FROM PAYING 
7 
THE WITHHOLDING TAX ON INTEREST INCOME FROM BANK 
8 
DEPOSITS, PROVIDED HOWEVER, THAT: (1) THE EXEMPTION 
9 
FROM PAYING THE WITHHOLDING TAX SHOULD NOT EXCEED SIX 
10 
HUNDRED THOUSAND PESOS (P600,000.00); AND (2) THE SENIOR 
11 
CITIZEN SHOULD PRESENT TO THE MANAGER OF THE BANK, IN 
12 
WHICH HE DEPOSITS HIS MONEY, HIS SENIOR CITIZEN'S ID AND A 
13 
CERTIFICATE FROM THE CHIEF OF THE AGENCY FIRM FROM 
14 
WHICH HE OR SHE RETIRED." 
15 
16 
SECTION 2. Separability Clause. - If any provision, or part hereof is held invalid or 
17 
unconstitutional, the remainder of the law or the provision not otherwise affected shall 
18 
remain valid and SUbsisting. 
19 
20 
SECTION 3. Repealing Clause. - Any law, presidential decree or issuance, executive 
21 
order, letter of instruction, administrative order, rule or regulation contrary to, or 
22 
inconsistent with, the provisions of this Act is hereby repealed, modified or amended 
23 
accordingly. 
24 
25 
SECTION 4. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
26 
publication in at least two (2) newspapers of general circulation. 
Approved, 
2