August 25, 2022

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Senate bill sets out incentive scheme for companies enabling tech-voc training

A BILL seeking to better match technical and vocational (tech-voc) education and training to the needs of the job market has been filed in the Senate, granting tax deductions to companies that offer apprenticeship-style training.

Senate Majority Leader Emmanuel Joel J. Villanueva said his Senate Bill 363, or the proposed Enterprise-based Education and Training to Employment Act, seeks to introduce an apprenticeship and dual training system to better prepare trainees for the workforce.

Enterprises that organize and implement enterprise-based training will be eligible for additional deductions against taxable income equivalent to 75% of the training expenses incurred; with donations, contributions, subsidies, bequests, or financial aid extended to a participating training institution fully deductible from gross income and exempt from donor’s tax.

“The bill can help the government continue to meet the changing needs of the market and put in place good governance mechanisms that can expand partnership with industry associations and companies through enterprise-based training,” he said.

Strengthening private sector participation through a national enterprise-based training system will resolve the job-skills mismatch and ensure the adequate supply of workers with skills vital to industry, he added.

The bill contemplates trainees who are high school graduates or the equivalent, and tested for vocational aptitude and capacity, and the ability to comprehend and follow oral and written instructions.

Participating enterprises are required to register their programs with the Technical Education and Skills Development Authority (TESDA) before entering agreements with trainees.

Participating employers must also establish an Enterprise-Based Education and Training Committee which will monitor and recommend measures for effective program implementation, and settle differences between management and trainees.

No enterprise will be allowed to engage trainees beyond 20% of the total number of regular employees. Trainees must also be given appropriate life and accident insurance, free of charge.

Every four years after the effectivity of the law, TESDA must conduct a review of its implementation, accomplishments and recommendations for further improvement.

Mr. Villanueva pushed employers and companies to invest in technical vocational graduates, noting that “our technical vocational education is among the best in the world” as “we have a pool of talent that can get every job done.” — Alyssa Nicole O. Tan