Editorial

Saving schools

Private schools in the country, along with some lawmakers, are actively urging the Bureau of Internal Revenue (BIR) to withdraw its mandate which imposes an increase in their income tax rate from the current 10 percent to 25 percent. Under the BIR Revenue Regulation No. 5-2021, “non-profit private schools” will have to pay for 10 percent income tax and “for-profit private schools” will have to pay for 25 percent income tax. 

The aforementioned call was led by Cocopea, an alliance of 2,500 private schools that are non-profit, for profit, sectarian, and non-sectarian. Cocopea argues that the regulation was “ill-¬conceived and insensitive to the realities of the private education sector” especially amidst pandemic, according to their statement released on June 1. Given the burdening effects of COVID-19 pandemic, is it really justifiable to force such increment? Who will truly suffer if it’s not rectified?

According to the Department of Education, nearly 900 private basic education schools have temporarily closed due to financial problems aggravated by the COVID-19. As a result, around 4,400 teachers were displaced and nearly 500,000 students transferred to public schools. Given the unprecedented increase of private school’s income tax, affected schools will likely increase their tuition payment and other fees. At its worst, private schools will be forced to cease its operations, displacing a significant portion of the 25 percent of the 30 million learners enrolled in private basic education schools and 55 percent of the private universities and colleges students.

Regardless of its nature, whether non-profit or for profit, private or public, schools are vital for human development and learning. It serves as an institution that prepares individuals become the future workforce and contributors to nation-building, social progress, social justice and common good, and achievement of quality life. With the imposition of the increase, it will affect the choices of the students. Amidst pandemic, parents, students, and other stakeholders are undeniably having difficulties financially, which may be a reason for students of private schools to make compromises and transfer to other educational institutions. This appears problematic because choosing one’s education is a vital preference. And the said increase may limit the preferences of students due to the burden of additional costs in tuition payments and other fees. Of course, not all people live in surpluses. Some just have enough to send them to their school of choice.  

Other dependent sectors will also be affected by the increase of income tax payment. At best, stores in school cafeteria and restaurants, dormitories, uniform stores, and other service-oriented industries will have to pay more for the use of facilities since the schools will be taxed more. Or if the school will decide to close, the operations of these industries will be halted.  

In principle, the CREATE law, where the said increase was derived, aims to cushion the impact of COVID-19. Hence, it must seek to save schools like any vital industries. And lawmakers must heed the call with sensitivity, compassion and understanding.