Scrapping of tax credits for public and private schools for children with disabilities
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On 21 May 2021, SARS published the LIST OF QUALIFYING PHYSICAL IMPAIRMENT OR DISABILITY EXPENDITURE (DRAFT FOR PUBLIC COMMENT). The most significant change is to items 7, 8 and 9 under paragraph F in the List (Services) dealing with the treatment of school fees and the recommendation that parents of children with disabilities and special educational needs should no longer receive tax credits for the school fees they pay in public and private schools more than what they would have paid in the closest mainstream government school.
In order to register for the SARS tax credit, parents of children with disabilities submit an ITR-DD completed by a specialist medical practitioner who recommends special education as an essential part of the child's treatment. Despite this, SARS now proposes scrapping the only government contribution these parents receive, namely a tax credit.
The following points are pertinent to this discussion:
· Children with disabilities are among the most underserved children by the South African government. There are very few public special schools and they invariably have long waiting lists. Because of this underprovision, many parents are forced into private education for their children with disabilities. The point of public special schools is, therefore, mainly academic.
· Mainstream public schools do not cater for children with special needs. Many parents drive long distances past several mainstream public schools to take their child to public or private schools that cater for their needs. This is a form of discrimination against children with disabilities.
· Special education (especially private) is invariably more expensive than mainstream public education. Where parents of children with disabilities are taxed the same as any other parent, they receive far fewer benefits than those whose children attend mainstream public schools.
· The private schools receive NO government support in the form of infrastructure or teachers' salaries. The schools are wholly supported by parents.
· Until now, parents of children with disabilities at least received a tax credit in the absence of service provision by the government. The tax credit is calculated as follows: if the closest mainstream government school to the family has fees of R2 000 per month and the special school costs R5 500, then parents would receive a tax credit on the amount they pay more than for the closest public school, i.e. R3 500 (NB: Parents pay the full amount for the private education but they may claim back a small portion of it at the end of the tax year). Parents who pay 25% tax on their annual income would be able to deduct R875 per month from their tax; if the parents are taxed at 33%, they would be able to claim back R1 155. This is the total amount of support a child with a disability in a private school receives for education from the South African government, compared to the more than R13 000 a year per learner the Gauteng province budgeted for each primary school learner in 2015 already (more recent reliable data unavailable—Children and South Africa's Education Budget). This is in addition to the basic infrastructure provided by the government to mainstream public schools.
Clearly, in the absence of sufficient public special needs education facilities for children with disabilities, and with parents of children with disabilities contributing to the education budget without benefitting from it to the same degree as parents of children in mainstream public schools, it would be unconscionable to scrap the minimal tax relief that parents are currently granted on their children's educational fees. As taxpayers, citizens, parents of children with disabilities and other concerned parties, we find the proposed scrapping highly discriminatory to a very vulnerable population and will resist it categorically.
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