FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S. No. __ 
2_G.::...., 3><-
Introduced by Senator Antonio "Sonny" F. Trillanes IV 
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 av~iiable for the banks to invest in worthwhile projects, further boosting our economy. 
Likewise, it is also provided in the fundamental law that: 
"The State recognizes the indispensable role of 
the private sector, encourages private enterprises and 
provides incentives to needed investments] ". 
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. 
~9~ 
rf1~ _______ 
10 "SONNc:-;\±RILLANES IV 
Senator 
1 Section 20, .Article II of the 1987 Philippine Constitution. 
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FIFTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S. N6. 
263 
_---":...::c.-""-
.~ 
.• 
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: 
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SECTION 1. Short Title.- This Act shall be known as the "Small Deposits Exemption 
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Law" and may be cited as such. 
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SEC. 2. Statement ofPolicy.- It is the policy of the State to promote social justice in all 
5· phases of national development. 
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It is hereby declared a policy of the state to protect the low income depositors to help 
, 
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them neutralize the effects of inflation by exempting them from the imposition of withholding 
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taxes so as to help maintain their purchasing power. 
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SEC. 3. Definition of Term. For the purposes of this Act these terms shall have the 
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following definitions: 
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a) "Savings Deposits" are deposits in banks which do not belong to the category of time 
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deposits and current accounts. 
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b) "Small Deposits" shall refer to savings deposits in any banking or quasi-banking 
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institutions amounting to one hundred thousand pesos (PIOO,OOO.OO) or less per person. 
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c) "Individual Tax Payment Scheme" shall mean the process which shall require 
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individual taxpayers to pay taxes on interests earned by bank deposits directly to the BIR. 
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d) "Withholding Tax" shall refer to the amount being reserved for tax payment which is 
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deducted from the interest earned by bank deposits. 
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SEC. 4. Exemption. Upon the passage of this law, all Savings Deposits in any banking or 
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quasi-banking institutions amounting to ONE HUNDRED THOUSAND PESOS (PIOO,OOO.OO) 
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or less shall be exempted from withholding taxes as required by the National Internal Revenue 
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Code. 
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SEC 5. Coverage. The benefits of this law shall be enjoyed only by natural persons as 
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defined by the Civil Code. 
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SEC. 6. Individual Payment of Taxes on Interests. Persons filing their Individual 
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Income Tax Returns shall be required to submit a Bank Certification as to the amount of their 
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deposits. Any certification reflecting one hundred thousand pesos or less shall be taxed 
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accordingly. They shall thereby be required to pay such amounts directly to the Bureau of 
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Internal Revenue or through the BIR's Accredited Collecting Institutions. 
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SEC. 7. Penalty Clause. Failure of the Taxpayer to declare his interest income and to pay 
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corresponding tax thereon shall be penalized by a fine or imprisonment or both. 
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SEC. 8. Rules amI Regulations. The Bureau ofInternal Revenue and the Bangko Sentral 
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ng Pilipinas (BSP) shall provide for the implementing rules and guidelines for the proper 
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enforcement of the provisions of this law. 
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SEC. 9. Separability Clause. Any provisions contained in this law which shall be 
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declared unconstitutional or invalid shall not in any way affect the validity or force of the other 
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provisions. 
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SEC. 10. Repealing Clause. Any provisions of any laws, ordinances. Proclamations, 
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orders, rules and regulations to the contrary shall be considered repealed accordingly. 
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SEC. 11. Effectivity Clause. This law shall take effect fifteen days after its complete 
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publication in the Official Gazette or in at least two newspapers of general circulation. 
Approved, 
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