The Senior Citizens Partylist expresses deep concern over the recent implementation of the 20% flat final withholding tax on savings interest under the Capital Markets Efficiency Promotion Act (CMEPA).
“While we recognize the intention to streamline Philippine tax systems and align with global standards, we cannot ignore the disproportionate impact this policy may have on our elderly population,” Rep. Rodolfo “Ompong” Ordanes said.
“For many senior citizens, particularly those who have since retired, interest income from time deposits and savings accounts serves as a source of passive earnings that cover daily needs, medical costs, and other essentials,” he added.
Prior to CMEPA, savings held in long-term time deposits enjoyed preferential and even exempt tax rates. This attracts senior citizens to save their hard-earned money in interest-bearing accounts in banks.
The uniform 20% tax, Rep. Ordanes said, will significantly reduce the already limited income of senior citizens who entrusted their savings in the banks.
“While we acknowledge that investments made before July 1 will retain their original tax treatment until maturity, we are calling for further protection and exemption for senior citizens moving forward, especially those with small to medium savings whose interest income is vital for their retirement,” Rep. Ordanes said.
The partylist representative called on the Department of Finance and Bureau of Internal Revenue to heed to the call of the elderly population by providing tax exemptions or reduced rates for senior citizen depositors, especially those below a certain income threshold and ensure greater transparency and consultation in the rollout of tax reforms that affect vulnerable sectors.
Support programs can also help senior citizens, who should not be placed at a disadvantage by policies meant to boost the country’s economy, Rep. Ordanes concluded.