MISLEADING: A “new” 20% tax on bank savings starting in 2025

Jamayka Rhose Pascual

Social media platforms have been circulating posts announcing that a new 20% tax will be charged soon on individuals’ bank savings, which has caused panic among depositors for fear that their savings will be decreased.

These posts employ sensationalized words, including “bubuwisan na ang ipon mo,” causing a misunderstanding about what is being taxed by the government.

CLAIM: A fresh 20% tax will be taken directly from bank savings accounts in the Philippines starting in 2025.

RATING: MISLEADING

CONCLUSION:

There is no new tax imposed on individuals’ bank deposits. What there is — and has been for more than two decades — is a 20% tax on interest derived from deposits, not on the deposits themselves. This has been the policy since 1997 through the Tax Reform Act.

The facts:

• Deposits are not taxed — only the income they generate.
• The 20% tax only covers interest income, which is what your money earns while it remains in the bank, and not the cash you put in.
• This is not new. The provision has been in force since 1998 under Republic Act No. 8424, or the Tax Reform Act of 1997.
• Under RA 12214, or the Capital Markets Efficiency Promotion Act (CMEPA), signed into law in 2024, the same 20% rate now applies to interest from all new bank deposits, whether short-term or long-term. Previously, certain long-term deposits were offered reduced or exempt rates.
• A post from BitPinas initially claimed that the 20% tax applied only to “interest from new long-term deposits.” Though the caption was later updated “for clarity,” the correction still misstates the policy — the tax applies to all new deposits under CMEPA, not just long-term ones.
• As Palace Press Officer Claire Castro explained, this has been part of the nation’s tax regimen for a long time and must not cause any alarm:
• “Ang papatawan ng buwis ay hindi savings, kundi ang interest na kinikita sa ating savings.”
• There has not been a new government memo, law, or rule specifying an increase in tax or altering its applicability.
• No responsible news outlet has cited any change in the existing policy.

The bottom line:

Although the 20% tax on bank deposit interest income is true, it is not new and does not lower your savings. The deceptive posts mislead the public by presenting it as a direct tax on individuals’ bank accounts. To get reliable and current information, always check posts from accounts and websites like bir.gov.ph, officialgazette.gov.ph, and reputable media sources.