7 JU~ 30 ?,? rr 3 
FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
) 
P 
Introduced by Senator Loren Legarda 
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 eltierly 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 ’‘Senin? 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 popuIation. This as much we owe tc 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. 
LOREN LEGARDA 
Senator 


FOURTEENTH CONGRESS OF THE 
1 
First Regular Session 
1 
REPUBLIC OF THE PHILIPPINES 
1 
7 JUN 30 p 4  ‘“,j 
~ 
Introduced by Senator Loren Legarda 
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 N0.7432 
Be it 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; 
b. 
A minimum of twenty percent (20%) discount on admission fee 
charged by theaters, cinema houses and concert halls, circuses, 
carnivals and other similar places of culture, leisure and 
amusement; 
C. 
Exemption from training fees for socioeconomic programs 
undertaken 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 dentaI 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. 
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 
f. 


G. 
EXEMPTION FROM THE 20% WITHHOLDING TAX ON 
INTEREST 
INCOME 
FROM 
THE 
BANK 
DEPOSITS, 
PPROVIDED HOWEVER THAT 
1.) 
THE EXEMPTION FROM PAYING THE WITHIHOLDING 
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/SHE 
DEPOSITS HIS/HER MONEY HIS SENIOR CITIZENS 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,