The Korean Higher Education Council (KHEC) has proposed a policy to diversify the income structure of universities and enhance financial stability by introducing a full tax deduction for donations of 100,000 won. The initiative aims to encourage small donations from alumni, parents, and the local community to help alleviate the financial difficulties faced by universities.
On August 12, KHEC released a policy research report outlining the plan for the implementation of a full tax deduction for university donations of 100,000 won.
The core of this proposal is to amend the Tax Exemption Limitation Act to provide the same full tax deduction benefits for small donations to universities as currently offered for political contributions and hometown love donations. KHEC anticipates that this will foster a decentralized funding structure with voluntary participation from alumni, faculty, staff, and the local community, which are crucial for nurturing talent, research and development, and regional innovation.
The economic impact of the proposed system has also been detailed. According to KHEC's research, if the full tax deduction for donations of 100,000 won is implemented, university donations are expected to increase by approximately 9.6% compared to current levels. This translates to an additional 160 billion won annually, or about 800 million won per institution.
Furthermore, the proportion of donations in total university revenue is projected to rise from the current 1.6% to 2.5% by the third year of the system's implementation. KHEC believes that the increased funding will be invested in scholarships, improving educational environments, and research and development, ultimately enhancing the quality and competitiveness of higher education.
To address concerns about potential concentration of donations to specific universities, KHEC has proposed a mechanism to mitigate this issue. They suggested establishing a so-called 'University Coexistence Fund' to alleviate concentration and link it to separate funding for regional universities.
Lee Kyung-hee, Secretary General of KHEC, stated, "It is necessary to reduce the high dependence on tuition and government financial support, and to diversify the income structure of universities through the activation of donations. We will actively cooperate with the National Assembly and the government to implement the full tax deduction for university donations, enabling universities to play a central role in regional development."
On August 12, KHEC released a policy research report outlining the plan for the implementation of a full tax deduction for university donations of 100,000 won.
The core of this proposal is to amend the Tax Exemption Limitation Act to provide the same full tax deduction benefits for small donations to universities as currently offered for political contributions and hometown love donations. KHEC anticipates that this will foster a decentralized funding structure with voluntary participation from alumni, faculty, staff, and the local community, which are crucial for nurturing talent, research and development, and regional innovation.
The economic impact of the proposed system has also been detailed. According to KHEC's research, if the full tax deduction for donations of 100,000 won is implemented, university donations are expected to increase by approximately 9.6% compared to current levels. This translates to an additional 160 billion won annually, or about 800 million won per institution.
Furthermore, the proportion of donations in total university revenue is projected to rise from the current 1.6% to 2.5% by the third year of the system's implementation. KHEC believes that the increased funding will be invested in scholarships, improving educational environments, and research and development, ultimately enhancing the quality and competitiveness of higher education.
To address concerns about potential concentration of donations to specific universities, KHEC has proposed a mechanism to mitigate this issue. They suggested establishing a so-called 'University Coexistence Fund' to alleviate concentration and link it to separate funding for regional universities.
Lee Kyung-hee, Secretary General of KHEC, stated, "It is necessary to reduce the high dependence on tuition and government financial support, and to diversify the income structure of universities through the activation of donations. We will actively cooperate with the National Assembly and the government to implement the full tax deduction for university donations, enabling universities to play a central role in regional development."
* This article has been translated by AI.
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