Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

13" Congress
First Regular Session

HOUSEBILLNO.__—269

Introduced by the HON. MICHAEL JOHN “JACK” R. DUAVIT

EXPLANATORY NOTE

Over the past decades the National Government has pumped in
Billions of our resources into our public education system.
Unfortunately, despite all of our efforts to provide quality free
education to our citizenry, a great number of our citizens, children
and adults alike are, due to financial constraints of the family unit,
unable to make the step to tertiary and vocational education after
graduation from High School. The same constraints are keeping the
myriad undergraduate degree holders from pursuing higher education
thus hampering career advancement and the general improvement of
our work force.

We are fully aware that the National Government can not afford
to expand free education to cover higher education. We, however,
believe that through this proposed amendments to R.A. 8424,
otherwise known as the “Tax Reform Act of 1997”, this Congress can
help cushion the heavy monetary requirements of pursuing higher
and technical education by making a portion of tuition fees paid as
additional exemption for individual taxpayers and their qualified
dependents. The savings can be used by those qualified for other
necessities such as transportation, food, and school supplies, as well
as other miscellaneous fees charged by institutions throughout the
country.

Realizing that there is a dire need to be prudent while engaged
in the act of handing out such incentives, this bill limits the eligibility
of taxpayers in a way consistent with the rest of RA 8424, as well as
with the constitutional mandate requiring taxation to be equitable.

Finally, this bill will serve as an incentive for the individual



taxpayer to invest, as the government has, in himself and his
offeprings. When these individuals do this, it is most likely that in
due time, the government will be able to recoup the initial loss of
potential income, through income taxes from the institutions and from
the future graduates themselves.

In consideration of the foregoing, the early approval of this bill is

fervently sought.
wif DUAVIT



Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

13% Congress
First Regular Session

HOUSE BILL NO. 269

Introduced by the HON. MICHAEL JOHN “JACK” R. DUAVIT

ANACT
AMENDING REPUBLIC ACT NUMBERED EIGHTY FOUR HUNDRED
AND TWENTY FOUR, AS AMENDED, OTHERWISE KNOWN AS THE
“TAX REFORM ACT OF 1997”, AND FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assem

SECTION 1. Chapter VII, Section 35 of Republic Act No. 8424, as
amended, otherwise known as the Tax Reform Act of 1997, is hereby
further amended to read as follows:

CHAPTER VII - ALLOWABLE DEDUCTIONS

xxx
SEC. 35. Allowance of Personal Exemption for Individual Taxpayer. -
xxx

© ADDITIONAL EXEMPTIONS FOR __ INDIVIDUAL
‘TAXPAYER AND QUALIFIED DEPENDENTS.

(1) | EXEMPTION OF INDIVIDUAL TAXPAYER ENROLLED IN AN
EDUCATIONAL INSTITUTION. - IN COMPUTING THE
TAXABLE INCOME OF A_ FILIPINO TAXPAYER,
REGARDLESS OF WHETHER OR NOT HE IS A
COMPENSATION EARNER, IS ENGAGED IN BUSINESS OR
TRADE, OR IN THE PRACTICE OF A PROFESSION, THERE


2)

SHALL BE ALLOWED A DEDUCTION IN HIS GROSS
INCOME CONSISTING OF TWENTY (20%) OF THE TOTAL
AMOUNT PAID BY THE TAXPAYER FOR MATRICULATION
FEE FOR THE PRECEDING YEAR, WHETHER PAID
DIRECTLY TO THE INSTITUTION OR THROUGH A PRE-
NEED COMPANY, WHICH DEDUCTION SHALL IN NO
CASE EXCEED THE AMOUNT OF TWENTY FIVE
THOUSAND PESOS (P25,000.00), SUBJECT TO THE
FOLLOWING CONDITIONS:

(a) THE TAXPAYER IS OFFICIALLY ENROLLED DURING
‘THE PRECEEDING SCHOOL YEAR IN A STATE COLLEGE
OR UNIVERSITY OR IN AN _ EDUCATIONAL
INSTITUTION DULY RECOGNIZED BY THE
COMMISSION ON HIGHER EDUCATION (CHED), AND
THE TECHNICAL EDUCATION AND SKILLS
DEVELOPMENT AUTHORITY (TESDA) ;

(0) THE TAXPAYER IS OFFICIALLY ENROLLED IN A
VOCATIONAL OR TERTIARY COURSE, POST
GRADUATE STUDIES INCLUDED; AND.

(©) THE ANNUAL INCOME OF THE TAXPAYER SHALL NOT
EXCEED THREE HUNDRED THOUSAND PESOS
(300,000.00).

EXEMPTION FROM MATRICULATION OF QUALIFIED
DEPENDENT CHILDREN NOT EXCEEDING FOUR (4). - IN
COMPUTING THE TAXABLE INCOME OF A FILIPINO
TAXPAYER, REGARDLESS OF WHETHER OR NOT HE IS A
COMPENSATION EARNER, IS ENGAGED IN BUSINESS OR
TRADE, OR IN THE PRACTICE OF PROFESSION, THERE
SHALL BE ALLOWED A DEDUCTION IN HIS GROSS
INCOME CONSISTING OF TWENTY FIVE PERCENT (25%)
OF THE TOTAL AMOUNT PAID BY THE TAXPAYER AS
MATRICULATION FEE FOR THE EDUCATION OF HIS
CHILDREN, NOT EXCEEDING FOUR (4) FOR THE
PRECEDING SCHOOL YEAR, WHETHER PAID DIRECTLY
TO THE INSTITUTION OR THROUGH A PRE-NEED
COMPANY, WHICH DEDUCTION SHALL IN NO CASE
EXCEED THE TOTAL AMOUNT OF FIFTY THOUSAND
PESOS (P50,000.00), SUBJECT TO THE FOLLOWING
CONDITIONS:

(a) THE INDIVIDUAL TAXPAYER MUST HAVE OFFICIALLY
ENROLLED HIS QUALIFIED DEPENDENT CHILDREN IN
ANY OF THE STATE COLLEGES AND UNIVERSITIES;
AND/OR PRIVATE SCHOOLS DULY RECOGNIZED AND

TS



ACCREDITED BY THE DEPARTMENT OF EDUCATION
(DepEd), THE COMMISSION ON HIGHER EDUCATION
(CHED) AND THE TECHNICAL EDUCATION AND
SKILLS DEVELOPMENT AUTHORITY (TESDA);

(b) THE CHILDREN MUST BE SINGLE AT THE TIME OF
THEIR ENROLLMENT;

(©) THE CHILDREN ARE OFFICIALLY ENROLLED IN
EITHER VOCATIONAL OR TERTIARY LEVELS BUT ARE
NOT TAKING POST-GRADUATE STUDIES; AND

(d) THE ANNUAL INCOME OF THE TAXPAYER DOES NOT
EXCEED THREE HUNDRED FIFTY THOUSAND PESOS

(350,000).
() CHANGE OF STATUS. -
xx x
® PERSONAL EXEMPTION ALLOWABLE TO

NONRESIDENT ALIEN INDIVIDUAL. -
xxx

SECTION 2. At the end of every fiscal year, the Department of
Education, the Department of Finance, the Commission on Higher Education
and the Technical Education and Skills Development Authority shall submit
an annual report to the Senate and the House of Representatives. Said report
shall contain, but shall not be limited to, among others, the status of the
implementation of this Act; the amount of deductions claimed; and the
number of taxpayers who availed of the deductions under this Act.

SECTION 3. _ Within forty five (45) days from the effectivity of
this Act, the Secretary of Finance, the Secretary of Education, the Chairman of
the Commission on Higher Education and the Technical Education and Skills
Development Authority shall, after consultation with the affected parties,
promulgate the necessary rules and regulations for the effective
implementation of this Act.

SECTION 4 If, for any reason, any provision of this Act is
declared unconstitutional or invalid, the other parts or provisions hereof
which are not affected thereby shall continue to be in full force and effect.
SECTION 5. This Act shall take effect fifteen (15) days after its
complete publication in at least two (2) newspaper of general circulation.

Approved,

TF