Punishing savers

Punishing savers | Daily Tribune

It’s no surprise that public outrage is growing over Republic Act No. 12214, also known as the Capital Markets Efficiency Promotion Act (CMEPA), particularly its provision slapping a flat 20-percent tax on interest of bank deposits effective 1 July 2025.

The Department of Finance (DoF) dismisses the backlash as “fake news,” but the frustration is real — and justified. While the government claims this “levels the playing field,” it feels like just another way to squeeze money from ordinary Filipinos who are already struggling to save money.

The DoF insists this isn’t a new tax. Technically true, since short-term deposits were already taxed at 20 percent. But before CMEPA, long-term savers (those who locked their money away for five years or more) enjoyed tax-free interest. Now, they get hit with the 20-percent rate. The government’s reasoning? The old system favored the wealthy, who could afford to make long-term deposits.

What’s the problem? This doesn’t help the poor, but just drags everyone down. Instead of lifting up short-term depositors by reducing their tax burden, the government chose to increase taxes on long-term savers.

How is that fair? If the goal was truly equity, why not lower the tax for everyone instead of raising it for some?

Filipinos already face multiple layers of taxation, including income tax, VAT, excise tax, digital tax, and more. Now, even the meager interest from hard-earned savings isn’t safe. The argument that only the “interest is taxed, not the principal” is bitter solace.

For someone earning two-percent interest on a P50,000 deposit, that’s P800 after tax — hardly enough to combat the worsening inflation.

Meanwhile, the government insists this will make the system “fair.” But where is the fairness when corruption remains rampant? Billions vanish into questionable projects, yet the solution is always to take more from ordinary citizens rather than recover the stolen funds or tax the ultra-rich properly.

The DoF claims that only 0.4 percent of depositors benefited from the old tax breaks. But instead of asking why so few could access long-term savings — perhaps due to low wages and financial insecurity — their response was to penalize those who could save at all. Forget their reform claim — it is resignation.

Worse still, while small savers lose more of their earnings, big corporations and politicians continue to exploit loopholes. Why isn’t the DoF as aggressive in chasing tax evaders among the elite as it is in taxing a lowly employee’s deposit?

Of course, we feel betrayed. We are taxed at every turn — when we work, spend, and now even when we try to save. If the DoF truly wants equity, it would cut wasteful spending, curb corruption, and lower taxes for the majority, rather than spreading the pain equally.

While officials lecture us on economic fairness, they refuse to fix the real problem — a system that bleeds ordinary Filipinos dry while letting the powerful stash wealth offshore. This 20-percent tax isn’t progress, after all. It is proof that when the government needs money, it always takes it from the people who can least afford it.

If the government keeps treating our savings like its personal ATM, maybe the safest place for our money really is under the mattress.

Or perhaps it’s time for a bamboo “alkansiya” because the government can’t tax what it cannot see.

On second thought, we shouldn’t have to hide our money because we deserve a government that protects us savers, not one that sees us as easy targets.

Until that happens, every peso tucked into an alkansiya isn’t just savings — it’s a SILENT PROTEST.