FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES

685

House Bill No.

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

EXPLANATORY NOTE

This bill seeks to exempt senior citizens from paying the final 20% withholding
tax on interest income from bank deposits to enable our elderly to fully utilize their
savings.

Section 4, Article XV of the 1987 Philippine Constitution states that the family
has the duty to care for its elderly members but the State may also do so through
juts programs of social security.

Pursuant to this policy, Republic Act No. 7432 also known as the “Senior
Citizens Act" and Republic Act No. 9257 also known as “Expanded Senior Citizens
Act of 2003” were enacted to grant benefits and special privileges to the elderly as
recognition of their significant role and contribution in society. Under these laws,
senior citizens are exempted from the payment of individual income taxes, provided
that their annual taxable income does not exceed the poverty level as determined by
the National Economic Development Authority (NEDA) for that year.

However, this exemption does not include exemption from payment of the
final 20% tax on interest income from bank deposits under the National Internal
Revenue Code. This failure derives most of senior citizens a substantial portion of
their income from the interest earnings on their life savings and retirement benefits
deposited in banks.

This bill aims to remedy that loophole by explicitly providing for such
exemption, subject to certain conditions imposed by law.


The State should be liberal in granting benefits to our elderly, who make up
about 6.4 percent or 5.2 million, of the population. This as much we owe to them for
devoting their productive years in the service of our nation

In view of the foregoing, immediate passage of this bill is earnestly sought
70

RUFYS B. RODRIGUEZ

MAXIMO’B, RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES

695

House Bill No.

Introduced by Representative Rufus B. Rodriguez and

Representative Maximo B. Rodriguez, Jr.

AN ACT

EXEMPTING THE BANK DEPOSITS OF SENIOR CITIZENS FROM THE 20%
WITHHOLDING TAX ON INTEREST INCOME, AMENDING FOR THE PURPOSE
OF THE REPUBLIC ACT NO.7432

Be jt enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Title Section 4 of RA 7432 shall be amended to read as follows

“SECTION 4. Privileges for the Senior Citizen - The senior citizens shall be
entitled to the following:

a

the grant of twenty percent (20%) discount from all
establishment relative to utilization of transportation services,
hotels and similar lodging establishments, restaurants and
recreation centers, and purchase medicine anywhere in the
country: provided that private establishments may claim cost as
tax credit;

A minimum of twenty percent (20%) discount on admission fee
charged by theaters, cinema houses and concert halls, circuses,
camivals and other similar places of culture, leisure and
amusement;

Exemption from training fees for socioeconomic ’ programs
undertaken by the National Economic and Development
‘Authority (NEDA) for that year

Exemption from training fees for socioeconomic programs
undertaken by the OSCA as part of its work;

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 and the Social Security System.


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
the PAG-IBIG, as the case may be, as are enjoyed by those in
actual service; AND

G. EXEMPTION FROM THE 20% WITHHOLDING TAX ON
INTEREST INCOME FROM THE BANK DEPOSITS,
PPROVIDED HOWEVER THAT:

1.) THE EXEMPTION FROM PAYING THE WITHHOLDING
TAX SHOULD NOT EXCEED SIX HUNDRED
THOUSAND PESOS (P600,000.00); AND

2.) THE SENIOR CITIZEN SHOULD PRESENT TO THE
MANAGER OF THE BANK IN WHICH HE/SHE
DEPOSITS HIS/HER MONEY HIS SENIOR CITIZEN'S
ID AND A CERTIFICATE FROM THE CHIEF OF THE
AGENCY/FIRM FROM WHICH HE RETIRED."

SECTION 2. Separability Clause — if any section or provision of this Act shall be
declared unconstitutional or invalid, the provisions hereof which are not affected
thereby shall continue to be in full force and effect.

SECTION 3. Repealing Clause ~ Laws, rules and regulations and other issuances
inconsistent with the provision of this Act are deemed modified, revoked or repealed
accordingly.

SECTION 4. Effectivity — this law shall take effect immediately upon its approval

Approved.