Inclusion of college tuition as allowable tax deduction pushed in Senate

Sen. Juan Edgardo Angara INQUIRER.net file photo

Senator Sonny Angara is pushing for the passage of a bill that seeks to include college tuition and related expenses as allowable deductions in computing taxable income.

Angara cited the high cost of tertiary education in the country when he pressed the passage of his Senate Bill 2228, which aims to amend Section 34 of the National Internal Revenue Code of the Philippines.

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The bill, if passed into the law, would allow payments for tertiary education tuition and allied educational expenses not exceeding P40,000 as tax deductions from the gross income of an individual.

“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, chairman of the Senate committee on ways and means, said in a statement on Friday.

Under the proposed measure, the deductions of up to four dependents for tertiary education, which include post secondary courses from higher educational and technical and vocational institutions, must be claimed by only one of the spouses in the case of married individuals.

The senator noted that in Malaysia, the allowable deduction on educational expense is up to 4,000 to 5,000 ringgit or equivalent to P60,000 to P70,000, while in Thailand, aside from tax deductions, an additional 2,000 baht or P3,000 per child is granted for educational allowance.

In the United States, he said, tuition and related fees deductible is up to a maximum of $4,000 or nearly P180,000 to the income of the taxpayer who shouldered the expense for his/her own, or for the spouse, or for the dependent.

“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.

The senator also noted a 2011 survey by the National Statistics Office, which shows that six million out of 39 million Filipinos aged between six and 24 are out-of-school youth. The same report also shows that 29 percent of high school graduates could not attend college because of its high cost.

“Access to tertiary education remains problematic and elusive especially to the poor and underprivileged Filipinos. This bill seeks to appease this problem by making tuition fees and allied expenses tax deductible from the gross income of the taxpayer,” Angara said. IDL