Increase in concession limit to cost millions in lost revenue, but critics brand rise 'pocket money'

PUBLISHED : Thursday, 08 March, 2001, 12:00am
UPDATED : Thursday, 08 March, 2001, 12:00am

Tax concessions for working adults enrolled in self-education courses will be raised from $30,000 to $40,000, but critics said it was no more than a little 'pocket money'.

An adult learner will save up to $1,500 - at the standard rate of 15 per cent for salary tax - from the $10,000 increase.

As a result, the Government estimates it will lose about $10 million in tax revenue next year, and $70 million over the period to 2004-05.

However, the rise failed to impress education critics who said the upper limit on tax exemption for adults undertaking continuing education should be lifted.

'There shouldn't be an upper limit on the concession at all. It wouldn't affect the Government's income a lot,' said Simon Wong Chi-hon, acting dean of Baptist University's School of Continuing Education.

'But it would serve as a gesture to show the Government does encourage people to pursue continuing education.'

Mr Wong, who is also a director of the Federation for Continuing Education in Tertiary Institutions, estimated up to 400,000 adults were enrolled in self-education programmes, spending an average of $5,000 to $6,000 on tuition fees each year.

Mervyn Cheung Man-ping, vice-president of the Hong Kong Association for Continuing Education, said: 'Actually, it would be best if there was no ceiling on the tax concession. The Government should do a review on how much the courses are costing before setting the limit.'

Professor Tam Sheung-wai, president of the Open University, at which almost all the 26,000 students are in full-time employment, said more low-interest or interest-free loan schemes should be made available to mature students.

The critics all said that the interest rate for a non-means tested loan scheme now offered by the Government's Student Financial Assistance Agency should be reduced from the current level of between eight and nine per cent to two per cent.

Neville Ko Yiu-ho, 35, who has paid almost $160,000 for an honours degree in social science at the Open University, said: 'The increase is no more than some pocket money.

'We pay taxes to support college-aged students but in return the support from the Government for us is so insignificant.'

Mr Ko, an insurance agent, has been able to have around $6,000 to $7,000 deducted from his income tax with the concession since taking the programme in 1995.

Tax exemptions for working adults enrolled in career-related education programmes were introduced in the 1996-97 Budget year with a maximum concession of $12,000. This was raised to $30,000 in the 1999-00 Budget year.

Up to January, more than 147,000 applications had been approved with a total of $1.8 billion waived.