A proposed measure has been filed seeking to allow college tuition fees and related expenses as tax deductions from the gross income of an individual in a bid to help parents cope with the rising college tuition fees and enable them to ensure the college education of their children.
Senate Bill 2228, introduced by Sen. Juan Edgardo Angara aims to amend Section 34 of the National Internal Revenue Code of the Philippines and include payments for tertiary education tuition fees and allied educational expenses as allowable deductions in computing taxable income.
Angara, who chairs the Senate committee on ways and means, said the purpose of tax deductions was to cut down the taxable income, thereby increasing the net income or the take-home pay of the taxpayers.
“Access to tertiary education remains problematic and elusive especially to the poor and underprivileged Filipinos. This bill seeks to appease this problem,” he pointed out.
Angara also cited an annual poverty indicator survey released by the National Statistics Office (NSO) recently that found that six million out of 39 million Filipinos aged between six and 24 are out-of-school youth or those who are not attending formal school or have not finished college or post-secondary courses.
The NSO also reported that 29 percent of high school graduates could not attend college because of the high cost.
By including college tuition fees and other related expenses in the tax deduction from the gross income of a taxpayer, Angara said, the government will also be encouraging the parents to send their school and working students to continue their education.
Angara said there were countries in Southeast Asia that implement such a tax incentive.
For instance, Malaysia has set the allowable deduction on educational expense to 5,000 ringgit or P69,000 on the income of taxpayer who is enrolled in the tertiary level, and up to 4,000 ringgit or P55,000 on the income of taxpayer whose dependent is over 18 studying in the tertiary level.
In Thailand, aside from tax deductions, an additional 2,000 baht or P2,700 per child is granted for educational allowance.
The senator said that while he recognized the limitation of government financial assistance such as scholarships, grants and student loans, there are still other means for the state to ensure that constitutional right of its citizens to quality education and providing tax deductions are one of them.
“We should not see this proposal as a possible revenue loss for the government. We should look at the bigger picture and think of the additional college graduates our country would produce and the significant contributions they could offer our society,” he noted.