THERE IS A GROWING discontent over the 20-percent tax on the interest on bank deposits with a maturity of more than three years.
And no less than Finance Secretary Ralph Recto is being blamed.
However, the Department of Finance (DOF) is quick to defend the move, saying the move was meant to level the playing field.
Prof. Emmanuel Leyco, an economist, said in a radio interview said it is the middle class that will be the middle class that will be hit by the 20-percent tax on interest income.
“Kasi po kapag mayaman ka, milyun-milyon ang iyong puhunan o milyun milyon ang inyong wealth, hindi po sa savings ilalagay ‘yan [kundi] nakalagay po sa mga [investment] instrument (The rich, they have millions in funds or millions in wealth, so they don’t put their money on savings but invest their funds), he said.
“Ang tatamaan po talaga rito (ay) yung mga maliliit na nag-impok. Mga middle income (earner) (The ones who will be hurt here are the small savers, the middle-income earners),” Leyco added.
There are also posts over Facebook slamming the move.
“If you have big amount of money in the bank, please withdraw and keep at home. Twenty percent. Naku po, Mr. Recto, ginawa mo noon sa value added tax, sobra pahirap lalona sa ko mahihirap (Mr. Recto, you imposed the value added tax before, and this is too much for people like me who is poor),” said Joselito Favillaran Latube
“Whatt? 20 percent tax na naman, si Recto na naman ? Kya wag kyo boboto sa mayaman kasi di nila alam paano naramdaman ng nasa ilalim ng masa (Twenty percent tax again? So, don’t vote for the rich as they are not aware of the how those who are the bottom of society feels),” said Malou Parco.
“Ang tatamaan po talaga rito (ay) yung mga maliliit na nag-impok. Mga middle income (earner) (The ones who will be hurt here are the small savers, the middle-income earners),” Prof. Emmanuel Leyco, an economist, said.
DOF DEFENDS MOVE
The 20-percent income tax on bank accounts with a maturity of more than three years is stipulated under the Capital Markets Efficiency Promotion Act (CMEPA), which the DOF claims does not impose a new tax but standardizes the tax rate on interest income to correct an unfair system that favored the wealthy.
“More specifically, the deposits that benefited from favorable rates are those with a maturity period of more than five years, which are tax exempt, while deposits that mature in 4 to 5 years and 3 to 4 years are subject to just 5-percent and 12-percent tax, respectively,” the DOF said.
This will be effective starting July 1 this year.
The DOF also asserted that CMEPA empowers ordinary Filipinos to invest and diversify their sources of income by reducing the stock transaction tax (STT) rate from 0.6 percent to 0.1 percent, reducing the documentary stamp taxes (DST) on original issuance of shares from 1 percent to 0.75 percent, and removing the DST on collective investment schemes.
