House bill raises age of taxpayers' dependents to 23

MANILA, Philippines - Taxpayers' children aged 23 should be included in the list of dependents because of the two extra years in the K to 12 system, a lawmaker has proposed in the House of Representatives.

Caloocan City 2nd District Rep. Edgar R. Erice said the additional two years of learning under Republic Act 10533 or the Enhanced Basic Education Act (K to 12), inevitably carries with them additional cost to the parents, who under the Family Code of the Philippines, are bound to give support for their children, even beyond the age of majority.

"Thus, it is only reasonable for these parents to be granted reprieve by way of adjusting the age requirements of dependents for individual taxpayers' availment of additional exemptions," said Erice, a vice chairman of the Committees on Public Works and Highways, and on Suffrage and Electoral reforms.

He explained that presently, Section 35(B) of the National Internal Revenue Code (NIRC) limits the availment of additional exemptions for dependents to only those who, aside from being chiefly dependent upon and living with the taxpayer, are unmarried and not gainfully employed, and must also be not more than 21 years of age.

However, by virtue of Republic Act 10533, dependents will only be able to finish college and be gainfully employed, generally speaking, when they reached 23 years of age, according to Erice.

"It is only right, therefore, for the age requirement of dependents to be adjusted from 21 to 23 years of age. The additional exemption in the amount of P25,000 annually that would be saved by parents will be of great help to finance the education and ensure a good future for their dependents," said Erice.

Republic Act 10533 was enacted to provide an enhanced basic education program that encompasses at least one year of kindergarten education, six years of elementary education and six years of secondary education.

Secondary education will, starting from 2016, include four years of junior high school and two years of senior high school education. The law, in effect, added two more years of learning so that Filipinos will be afforded more time to develop skills that would enable them to be competitive not only within the Philippines, but more importantly, in the international arena.

House Bill 5559, now pending at the Committee on Ways and Means, seeks the amendment of Section 35(B), Chapter 7 of RA 8424, otherwise known as the "National Internal Revenue Code of the Philippines." Section 35, which pertains to Allowance of Personal Exemption for Individual Taxpayer, allows an additional exemption of P25,000 for each dependent not exceeding four.

The amendment provides that "a 'dependent' means a legitimate, illegitimate or legally adopted child chiefly dependent upon and living with the taxpayer if such dependent is not more than 23 years of age, unmarried and not gainfully employed or if such dependent, regardless of age, is incapable of self-support because of mental or physical defect."