US Edition20% Tax on Interest Income From Bank Deposits - How Does It Work?
PHILIPPINES, JUL 16 – The Capital Markets Efficiency Promotion Act standardizes a 20% tax on interest income to enhance transparency and investor confidence, affecting over 99.6% of deposit accounts, officials said.
- On July 1, 2025, major Philippine banks applied a flat 20% final withholding tax on interest income, overhauling the previous tiered system.
- Signed into law on May 29, 2025, the Capital Markets Efficiency Promotion Act set out to simplify passive income taxes and align Philippine markets with international standards.
- Philstar reported that banks applied the uniform 20% rate to all accounts, while deposits made before July 1 keep prior tax terms until maturity.
- Public backlash is growing over the deposit tax, and the Department of Finance blamed it on `fake news`.
- According to Secretary Ralph Recto, the law is expected to generate over PHP 25 billion in revenue through 2030, lowering the fiscal deficit and improving access to capital for ordinary Filipinos.
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The Department of Finance (DOF) confirmed and clarified the 20% tax on savings or bank deposits, but it is said that not the total savings will be taxed, but only the interest or profit.
Explained: Is CMEPA fair to small savers and average-income Filipinos?
While the Capital Markets Efficiency Promotion Act seeks to simplify tax rates and promote long-term savings, it has drawn a wave of misinformation—and raised legitimate concerns about its impact on ordinary Filipinos.
20% tax on interest income from bank deposits - How does it work?
MANILA, Philippines — Public backlash is growing over parts of the Capital Market Efficiency Promotion Act (CMEPA), particularly provisions on taxing interest from bank deposits. And the Department of Finance (DOF) has pushed back, blaming “fake news” for the online chaos. The DOF said, “CMEPA does not impose a new tax, instead standardized the tax
DOF: No new tax imposed, just fairer rules for bank depositors
MANILA — The Department of Finance (DOF) has debunked claims that a new tax was imposed on bank deposits, stressing that the recently enacted Capital Markets Efficiency Promotion Act (CMEPA) merely levels the playing field by standardizing tax rates on interest income across all deposit terms. The clarification came after Finance Secretary Ralph Recto faced […]
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