FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
7 t I ' 2 0  
First Regular Session 
1 
SENATE 
Introduced by Senator Antonio "Sonny" F. Trillanes N 
EXPLANATORY NOTE 
This bill seeks to equalize the purchasing power between the rich and the poor by not 
unduly depriving the latter of the use of the interests which their deposited funds earn from 
the banking system. If no deduction is made on the deposit of simple folks, more people 
may even put their money in these institutions and the banking industry will flourish. 
Consequently, more money will be available for the banks to invest in worthwhile projects, 
further boosting our economy. 
Likewise, it is also provided in the fundamental law that: 
"The State mcoanizes the indispensabte rob of 
the private sector, encourcCaes private enterprises and 
provides incentives to needed investmentsl*. 
With the exemption provided by this bill, people will no longer hesitate to avail of the 
services offered by banking institutions and consequently, money will be available for 
investments in productive projects. 
In view thereof, approval of this bill is urgently recommended. 
ANT&& 
TONNY~~ 
F. I?~ULIANES 
IV 
Senator 
' Section 20, Article I1 of the 1987 Philippine Constitution. 
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t I ” 20 
FOURTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
1 
SENATE 
\\\:.CL i V f U  w 1 -  
Introduced by Senator Antonio ”Sonny”F. Trillanes IV 
AN ACT 
EXEMPTING SAVINGS DEPOSITS AMOUNTING TO ONE HUNDRED 
THOUSAND PESOS OR LESS FROM WITHHOLDING TAX, AMENDING 
SECTION 21 (c) (1) OF THE 
NATIONAL INTERNAL REVENUE CODE, 
THEREBY, AND FOR OTHER PURPOSES. 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Wk. This Act shall be known as the “Small Deposits 
Exemption Law ” and may be cited as such. 
SEC. 2. Srutement of Policy. It is the policy of the State to promote social justice 
in all phases of national development. 
It is hereby declamd a policy of the state to protect the low income depositors to 
help them neutralize the effects of inflation by exempting them &om the imposition of 
withholding taxes so as to help maintain their purchasing power. 
SEC. 3. DefiniriOn of Term. For the purposes of this Act these terms shall have 
the following definitions: 
a) “Savings L?eposits” are deposits in banks which do not belong to the category of 
time deposits and current accounts. 
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b) “Small Deposits” shall refer to savings deposits in any banking or quasi- 
banking institutions amounting to one hundred thousand pesos (PlO0,OOO.OO) or 
less per person. 
c) “Zndividuul Tax Puyment Scheme” shall mean the process which shall require 
individual taxpayers to pay taxes on interests earned by bank deposits directly 
to the BIR. 
d) “Withholding Tax” shall refer to the amount being reserved for tax payment 
which is deducted from the interest earned by bank deposits. 
SEC. 4. Exemption. Upon the passage of this law, all Savings Deposits in any 
banking or quasi-banking institutions amounting to ONE HUNDRED THOUSAND 
PESOS (PlO0,OOO.OO) or less shall be exempted from withholding taxes as required by the 
National Internal Revenue Code. 
SEC 5. Coverage. The benefits of this law shall be enjoyed only by natural persons 
as defined by the Civil Code. 
SEC. 6. Individual Payment of Taws on Interests. Persons filing their Individual 
Income Tax Returns shall be required to submit a Bank Certification as to the amount of 
their deposits. Any certification reflecting one hundred thousand pesos or less shall be 
taxed accordingly. They shall thereby be required to pay such amounts directly to the 
Bureau of Internal Revenue or through the BIR’s Accredited Collecting Institutions. 
SEC. 7. PenuiQ Clause. Failure of the Taxpayer to declare his intexest income and 
to pay corresponding tax thereon shall be penalized by a fine or imprisonment or both. 
SEC. 8. Rules and Regulations. The Bureau of Internal Revenue and the Bangko 
S e n d  ng Pilipinas (BSP) shall provide for the implementing rules and guidelines for the 
proper enforcement of the provisions of this law. 
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SEC. 9. Separabili!v Clause. Any provisions contained in this law which shall be 
declared unconstitutional or invalid shall not in any way affect the validity or force of the 
other provisions. 
SEC. 10. Repealing Clause. Any provisions of any laws, ordinances. 
Proclamations, orders, rules and regulations to the contrary shall be considered repealed 
accordingly. 
SEC. 11. Effectiv& Clause. This law shall take effect fifteen days after its 
complete publication in the Official Gazette or in at least two newspapers of general 
circulation. 
Approved, 
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