THIRTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
1 
'04 CEC 16 i'3 :ai 
First Regular Session 
1 
Introduced by Senator Miriam Deknsor 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 justprograms of social security. (Italics supplied) 
Republic Act No. 7432 granted to senior citizens exemption from the payment of 
individual taxes 011 their income up to a certain level to be determined by the National Economic 
Development Authority VEDA). 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, specially 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 srelts to correct this oversight by explicitly providing for the exemption of 
bank deposits of senior citizens from the withholding tax on interest income. 


, 
THIRTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
1 
'@] 
16 1'3 :41 
First Regular Session 
1 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
EXEWTING THE BANK DEPOSITS OF SENIOR CITIZENS FROM THE TWENTY 
PERCENT (20%) WITHHOLDING TAX ON INTEREST INCOME, AMENDMG 
REPUBLIC ACT NO 7432 
Be if encrcfed by the Senate and the House of Represenfatwes of the Philippines in 
('origre.ss assernhled 
SECTION 1. Section 4 of Republic Act No. 7432 shall be amended to read as follows: 
"SECTION 4 Privilegesfor the Senior Cifizens. - 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 establishmeEts, 
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 form 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); 


c 
(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-IBIG, 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 AGENCY/FIRM FROM WHICH HE 
OR SHE RETIRED.” 
SECTION 2. Sepambility Clause. - 
If any provision, or part hereof is held invalid or 
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
valid and subsisting. 
SECTION 3. Repealing 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. 
SECTION 4. l?ffictivi/y Clause. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
Approved, 
ibaf