MANILA, Philippines – Senator Juan Edgardo Angara is proposing that college tuition fees and other related expenses be deducted from the gross taxable income of the ones sending the children to college.

Senate Bill 2228, filed in May, seeks to amend Section 34 of the National Internal Revenue Code of the Philippines, which specifies the deductions allowed.

“Such initiative is also a way of encouraging the parents to send their children to school and for working students to continue their education because of the tax incentives they could get,” Angara said in a statement Friday, June 20.

Tax deductions increase the take-home pay of a taxpayer as the taxable income decreases. 

With Angara’s proposed bill, a parent, or any person exercising parental authority, who shoulders the college tuition fees and other expenses, will be allowed a deduction of not more than P40,000 for each dependent not exceeding 4 for the taxable year. 

The bill says even vocational and technical courses, as long as taken after high school, are covered by the proposal. Even working students supporting themselves can benefit from the proposed amendment.

For married individuals, only one spouse can claim the deductions meant for educational expenses in post-secondary courses of higher educational and technical and vocational institutions.

In the case of legally-separated spouses, only the one with the custody of the dependent can avail of the deductions. 

Additional graduates

Angara said access to higher education is still “problematic and elusive,” especially for less-privileged Filipinos. 

Citing a 2011 Annual Poverty Indicators Survey of the National Statistics Office, the senator said 6 out of 39 million Filipinos aged 6-24 are out-of-school youth or are not attending formal schooling. 

“The same report also indicates that 29% of high school graduates could not attend college because of its high cost,” he added. 

He said the bill must not be seen as a possible revenue loss for the government. (READ: Tuition hike? Check quality of education first – Bam Aquino)

“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 said.

The Philippines’ neighboring countries allow deductions meant for educational expenses, Angara noted.

Malaysia allows a deduction of 5,000 ringgit (P69,000) for a taxpayer enrolled in college, and up to 4,000 ringgit (P55,000) for taxpayers whose dependent is a college student older than 18 years old.  

In Thailand, an additional 2,000 baht (P2,700) for every child is granted for educational allowance aside from the tax deductions. 

Meanwhile, the United States allows a maximum of $4,000 (P176,000) in tax deductions from a taxpayer’s income.  

“Given the limitations of government financial assistance such as scholarships, grants and student loans, providing tax deductions is an effective way of helping the poor and underprivileged Filipino families who have to spend a huge part of their small incomes to pay for education,” Angara said. – Rappler.com