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Liberal tax relief for education could spur an international services industry
The recent EU recommendations on Ireland’s labour market have highlighted poor participation in training and education in the workforce. Our tax legislation relating to training is not as helpful as it might be.
Begrudging reliefs
At present there are three reliefs for costs borne by a taxpayer in the acquisition of an improved education or additional levels of skills. They are remarkably limited in their application and have a begrudging feeling about them.

Relief is available for fees paid in respect of a third level under graduate course. The course must be an approved course. The college may be in the state or elsewhere in the EU but in the latter case must be a state funded college. The course can be full time or part time.
A further relief relating to fees for courses in information technology and foreign languages is legislated for. It is not in operation pending a ministerial order, more than two years after it was enacted.

The reliefs come with state control wrapped around them. The civil service must double check the taxpayers choice of college and course even though the taxpayer is paying with his own money. The reliefs are focused largely on academic education and do not apply to second level education nor to post graduate study.

Radical Proposal
Tax Monitor has previously suggested a radical taxation measure aimed at education and skill acquisition.

That is that the existing very limited tax reliefs for the payment of
fees to third level education be liberalised. The proposal is that all fees paid for educational courses of any nature whatsoever should be
tax deductible.

If a brain surgeon wants to take a cookery course, let him. Don’t have the Department of Education or the Department of Finance second guess whether this is a good idea. If he is willing to spend his money on the course, give a tax break on the expenditure. It takes an act of faith to realise that while some choices made in terms of education, and additional skills and training will not have positive economic results in the long term, taking the population as a whole, adding to the pool of skills of all sorts held by the Irish people will inevitably generate further economic expansion.

Even a brain surgeon who has taken a cookery course may find that it leads to the creation of a catering firm which he can manage while continuing his medical duties.

Private Educational Sector
The predominance of State funded educational facilities in Ireland has lead to a weak marketplace in the provision of education. The cost of privately funded education can be high, especially when paid for out of after tax income. Marginal tax rates remain high! The expansion of training and education on a large scale is likely to require that it be paid for out of pre-tax income.

The digital age is upon us. If privately funded and privately provided education were kick-started as suggested above, Ireland would find another growth industry with a product capable of being delivered over the Internet world-wide.

We need not rely solely on attracting in foreign educators to provide web based educational services internationally.

We can seek to develop the indigenous private sector in education by an enlightened investment through a liberalised tax relief.

Let us hope that the Minister will focus on this problem and opportunity in his forthcoming budget.

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