Fresh Graduates Incentives Act

Sentate Office of the Scretary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 26 FEB -2 P4:32 First Regular Session SENATE RECEIVED BY: S. No. 1738 Introduced by Senator JV Ejercito AN ACT GRANTING TAX INCENTIVES TO EMPLOYERS THAT HIRE FRESH GRADUATES FROM PROVINCIAL COLLEGES, UNIVERSITIES AND TRAINING CENTERS, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES EXPLANATORY NOTE Since time immemorial, it has been instilled in us Filipinos that education is the key to success. We believe that education is the tool to uplift one's life from poverty. So it is a normal occurrence especially in rural areas across the country for parents to give up everything so that their children can graduate. But graduation, no matter how gratifying it seems, does not instantly improve the economic wellbeing of a family. A diploma does not automatically change one's life for the better. It only gives a graduate a fighting chance in a current marketplace of job applicants seeking employment. Job seeking has always been difficult for a fresh graduate as employers would prefer a more experienced applicant. In a developing country such as the Philippines, competition is necessary to keep a business afloat. Corporations would not usually want to gamble its future with a fresh graduate. And so employment for someone who just graduated becomes more challenging. Fresh graduates from the provinces face an uphill battle in finding gainful employment. Many companies are more inclined to hire experienced workers. Oftentimes, they will consider graduates from popular universities. Such preferences leave graduates from the provinces overlooked despite their skills, potential, and determination. This proposed measure seeks to resolve the imbalances in opportunities by granting tax incentives to employers who hire fresh graduates from provincial colleges, universities, and training centers. Ten percent (10%) is deducted from the taxable income based on the starting gross salary of a hired fresh graduate. This bill not only encourages inclusivity in employment but also invests in the potential of our youth.

In view of the foregoing, the approval of this bill is earnestly sought. • • →00= JV EJERCITO

Senate Office of the Soccretarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) 26 FEB -2 P4:32 First Regular Session ) SENATE RECEIVED BY: S. No. 1738 Introduced by Senator JV Ejercito AN ACT GRANTING TAX INCENTIVES TO EMPLOYERS THAT HIRE FRESH GRADUATES FROM PROVINCIAL COLLEGES, UNIVERSITIES AND TRAINING CENTERS, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in 2 Congress assembled:

Section 1. Short Title. - This Act shall be known as the "Fresh Graduates

5 Incentives Act."

Sec. 2. Declaration Policy. - It is hereby declared the policy of the State to

7 adopt measures to ensure the welfare and protect the interest of the youth, particularly fresh graduates. Thus, it shall endeavor to improve opportunities and widen their access to employment.

Sec. 3. Definition of Terms. - As used in this Act,

(a) " Fresh Graduate"refers to a Filipino citizen who is not gainfully employed and has just graduated from a tertiary educational institution accredited by the Commission on Higher Education. Fresh graduates shall include Filipino citizens, not gainfully employed and has just finished a vocational course from school and training centers accredited by the Technical Education and Skills Development Authority (TESDA); (b) " Provincial Colleges, Universities, and Training Center" refers to tertiary educational institutions accredited by the Commission on Higher Education and educational institutions offering vocational and technical courses accredited by the TESDA from the Autonomous Regions and

Provinces with municipalities with an average annual income of not more than Fifty million pesos (P50,000,000.00).

Sec. 4. Deductions from Taxable Income. - As an incentive to companies and

4 employers to hire fresh graduates from recognized Provincial Colleges, Universities, 5 and Training Centers, a deduction from the computation of taxable income equivalent 6 to ten percent (10%) of the fresh graduate's starting gross salary: Provided, however, 7 That the tax deductions shall not exceed ten (10%) of its taxable income: Provided, further, That the tax deduction under this section shall be evidenced by a certified true copy of the fresh graduate's diploma, certification or document issued by the 10 educational, vocational, or technical institution from which he or she has graduated.

Sec. 5. Implementing Rules and Regulations. - The Bureau of Internal Revenue,

in coordination with the other pertinent government agencies, shall promulgate rules and regulations necessary for the implementation of this Act within six (6) months from its effectivity.

Sec. 6. Repealing Clause. - All laws, presidential decrees, executive orders,

16 memoranda, circulars, and other issuances, or parts thereof, which are inconsistent with the Act, are hereby repealed or modified accordingly.

Sec. 7. Separability Clause. - Any portion or provisions of this Act that may be

declared unconstitutional or invalid and shall not have the effect of nullifying other portions or provisions hereof as long as such remaining portions or provisions can still subsist and be given effect in their entirety.

Sec. 8. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation. Approved,