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Republic of the Philippines ee +e PH
HOUSE OF REPRESENTATIVES

Quezon City . a
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SIXTEENTH CONGRESS

First Regular Session

_ 2567

House Bill No.

Introduced by Hon, Sol Aragones

EXPLANATORY NOTE

Republic Act No. 7432, as amended by Republic Act No. 9257, otherwise known as
"Expanded Senior Citizens Act of 2003, " granted senior citizens an exemption from the
payment of individual taxes based on their income up to a certain level to be determined by
the National Economic Development Authority (NEDA). This exemption, however, does not
include the final twenty percent (20%) withholding tax on interest income from bank
deposits. The failure to extend the exemption to bank deposit income is a violation of the
intent of the law. This is highlighted by the fact that most senior citizens derive a substantial
portion of their income from the interest on their savings and retirement benefits which are
deposited in banks.

This bill aims to correct this oversight by expressly providing fpr the exemption of

bank deposits of senior citizens from the coverage of the withholding tax on interest income.

Oe

Representative, 3" District of Laguna


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

2567

House Bill No.

Introduced by Hon. Sol Aragones

AN ACT EXEMPTING THE BANK DEPOSITS OF SENIOR CITIZENS FROM THE
TWENTY PERCENT (20%) WITHHOLDING TAX ON INTEREST INCOME,
AMENDING FOR THIS PURPOSE REPUBLIC ACT NO. 7432, AS AMENDED BY
REPUBLIC ACT NO. 9257

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

SECTION 1. Section 4 of Republic Act No. 7432, as amended by Republic Act No.
9257, otherwise known as "Expanded Senior Citizens Act of 2003" is hereby further

amended to read as follows:

SEC. 4. Privileges for the Senior Citizens. - The senior citizens

shall be entitled to the following:

(@) the grant of twenty percent (20%) discount from all
establishments relative to the utilization of services in hotels and similar
lodging establishment, restaurants and recreation centers, and purchase of
medicines in all establishments for the exclusive use or enjoyment of
senior citizens, including funeral and burial services for the death of senior

citizens;

(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 for

the exclusive use or enjoyment of senior citizens;


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(©) exemption 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 and Development Authority
(NEDA) for that year;

(@) exemption from training fees for socioeconomic programs;

() free medical and dental service, diagnostic and laboratory fees
such as, but not limited to, x-rays, computerized tomography scans and
blood tests, in all government facilities, subject to the guidelines to be
issued by the Department of Health in coordination with the Philippine
Health Insurance Corporation (PHILHEALTH);

(f) the grant of twenty percent (20%) discount on medical and
dental services, and diagnostic and laboratory fees provided under Section

4 (e) hereof, including professional fees of attending doctors in all private

hospitals and medical facilities, in accordance with the rules and
regulations to be issued by the Department of Health, in coordination with

the Philippine Health Insurance Corporation;

(@ the grant of twenty percent (20%) discount in fare for domestic

air and sea travel for the exclusive use or enjoyment of senior citizens;

(h) the grant of twenty percent (20%) discount in public railways,
skyways and bus fare for the exclusive use and enjoyment of senior

citizens;

(i) educational assistance to senior citizens to pursue post
secondary, tertiary, post tertiary, as well as vocational or technical
education in both public and private schools through provision of
scholarship, grants, financial aid subsidies and other incentives to
qualified senior citizens, including support for books, learning materials,
Provided, That senior

citizens shall meet minimum admission requirement;

and uniform allowance, to the extent feasible:

(j) to the extent practicable and feasible, the continuance of the

same benefits and privileges given by the Government Service Insurance


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System (GSIS), Social Security System (SSS) and PAG-IBIG, as the case

may be, as are enjoyed by those in actual service.

(&) retirement benefits of retirees from both the government and
private sector shall be regularly reviewed to ensure their continuing
responsiveness and sustainability, and to the extent practicable and
feasible, shall be upgraded to be at par with the current scale enjoyed by

those in actual service.

(D) to the extent possible, the government may grant special
discounts in special programs for senior citizens on purchase of basic
commodities, subject to the guidelines to be issued for the purpose by the
Department of Trade and Industry (DTI) and the Department of
Agriculture (DA); [and]

(m) provision of express lanes for senior citizens in all commercial
and government establishments; in the absence thereof, priority shall be
given to them[.]; AND

(N) EXEMPTION FROM PAYING THE WITHHOLDING TAX
ST INCOME FROM BANK DEPOSITS PROVIDED THAT
PTION FROM PAYING THE WITHHOLDING TAX
SIX HUNDRED THOUSAND PESOS

THE
SHOULD NOT EXCI
(600,000.00).

In the availment of the privileges mentioned above, the senior
citizen or elderly person may submit as proof of his/her entitlement thereto

any of the following:

(a) an ID issued by the city or municipal mayor or of the barangay

captain of the place where the senior citizen or the elderly resides;

(b) the passport of the elderly person or senior citizen concerned;

and

(©) other documents that establish that the senior citizen or elderly

person is a citizen of the Republic and is at least sixty (60) years of age.


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‘The establishment may claim the discounts granted under (a), (N),
(g) and (h) as tax deduction based on the net cost of the goods sold or
services rendered: Provided That the cost of the discount shall be allowed
as deduction from gross income for the same taxable year that the discount
is granted. Provided, further, That the total amount of the claimed tax
deduction net of value added tax if applicable, shall be included in their
gross sales receipts for tax purposes and shall be subject to proper
documentation and to the provisions of the National Internal Revenue

‘Code, as amended.”

‘SEC. 3. This Act shall take effect fifteen (15) days from the date of its publication in

the Official Gazette or in at least two (2) newspapers of general circulation, whichever comes

earlier.

Approved,