DAVAO CITY – Councilor Danny Dayanghirang here filed a resolution strongly opposing the imposition of a 20 percent final withholding tax on interest income from bank deposits, a provision under Republic Act No. 12214, also known as the Capital Markets Efficiency Promotion Act (CMEPA).

The controversial provision, which took effect on July 1, mandates a uniform 20 percent tax on all interest income from bank deposits, regardless of currency denomination or deposit maturity.

Dayanghirang denounced the measure as unfair, particularly for low- and middle-income Filipinos, and retirees who rely on modest interest earnings from savings for long-term needs such as retirement, education, emergencies, and business capital.

“Some modest interest that Filipinos may earn on these savings critically helps depositors preserve the value that their money has amid inflation and rising cost of living,” said Dayanghirang, chairman of the City Council Committee on Finance, Ways and Means, and Appropriations.

Dayanghirang said that taxing interest on savings at a flat rate is “oppressive” and “inequitable,” especially in the context of existing financial burdens such as inflation and numerous other taxes and surcharges.

“This blanket taxation removes previous exemptions for long-term deposits and discourages saving behavior. It punishes those who are financially careful, rather than encouraging savings and responsible investment,” he said.

Dayanghirang expressed concern that the law could damage public trust in the banking system and undermine the financial security of middle-income earners and retirees.

He called on Congress to review, amend, or repeal the relevant provisions of CMEPA. Dayanghirang urged lawmakers to explore alternative taxation models that are fairer and more inclusive of low- and middle-income savers.

Dayanghirang appealed to the Department of Finance and the Bureau of Internal Revenue to suspend the implementation of the tax policy until proper public consultations and legislative reviews are conducted.