FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S.B. No. 1344 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
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,)IJL 13 1\9 :12. 
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 just 
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. 
~OREr-q LEGAR;A 
Senator 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SEN ATE 
S.B. No. 
1344 
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JUL 13 Ii 9 :12 
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 NO. 7432 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Title. - Section 4 of Republic Act No. 7432 is hereby 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 
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d. Exemption from 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 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 
AGENCYjFIRM 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. 
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SECTION 4. Effectivity. - This Act shall take effect immediately upon its 
approval. 
Approved, 
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