It's taxing!!!

It is a case of waking up a sleeping dog. Most depositors routinely ignore such tax deductions because a savings account earns almost nothing.

- BOO CHANCO

Savings deposits are mostly for safekeeping.

The banks woke up the sleeping dog by sending notices to depositors that they will be deducting an increased withholding tax of 20 percent on interest earned on all deposits. To weary taxpayers, it was too much.

The interest rates in time deposits are barely keeping up with inflation. But interest on money kept in a time deposit for five years and one day was tax-free.

DOF tried to sound populist. They are equalizing daw tax on interests earned from savings and time deposits because it is unfair to those who cannot afford to park their money for five years.

If equalization is the objective, just remove the tax on the interest on savings.

Taxing interest income on deposits is hitting the middle class. Reforming our tax system should aim to protect this thin segment of our society, populated by OFWs and BPO agents among others, who are carrying the burden of growing our economy.

We need a fair system of effectively collecting taxes from those who can afford it. Our government always takes the easy way out.

The tax on interest income on deposits is easy to collect from the banks. Same with the value added tax imposed on every consumer, merchant and self-employed professional. The tax on oil products and electricity is also easy to collect.

Petroleum products are subject to both a specific excise tax (P10 per liter for gasoline and P6 per liter for diesel) and the standard 12 percent VAT. Since VAT is a percentage of the final retail price, every time oil prices increase, it goes up as well.