WITH enrollment for basic education plunging by 66 percent, private school associations expressed hope the Senate will expedite the approval of a bill that aims to rectify a Bureau of Internal Revenue regulation imposing a 150-percent increase in taxes.
Officials of the private schools said in a joint statement they urge Senate Committee on Ways and Means Chairman Senator Pia Cayetano and senators to expedite the passage of Senate Bill (SB) 2272, “in order to rectify with finality the flawed interpretation of a provision under the Corporate Recovery and Tax Incentives for Enterprises [Create] Act.” The statement, signed by Coordinating Council of Private Educational Associations (Cocopea) Chairman and Philippine Association of Colleges and Universities (Pacu) President Anthony Jose M. Tamayo and Cocopea Managing Director Joseph Noel M. Estrada, noted the flawed interpretation was set in Revenue Regulation (RR) 5-2021 by the Bureau of Internal Revenue (BIR).
Introduced by Sen. Juan Edgardo M. Angara, SB 2272 amends Section 27(B) of the National Internal Revenue Code (NIRC) of 1997.
Cocopea and Pacu noted that BIR RR 5-2021 imposes a 150-percent increase in the corporate income of private educational institutions and deprives them of “the much-needed tax relief intended by the Create law’s authors in both the Senate and the House of Representatives.”
Critical state
TAMAYO and Estrada, who are both lawyers, said the education sector “is in [a] critical state” as it starts a new school year.
The officials said that based on the “quick count” data of the education department’s Learner Information System as of September 13, enrollment in private schools in basic education for school year (SY) 2021 to 2022 is only at 1.443 million. This figure is down 57 percent from the 3.376 million enrollment in SY 2020 to 2021 and down 66 percent from 4.305 million in SY 19-20 before the pandemic.
They added that most private schools won’t be expecting a substantial increase on these numbers from late enrollees, “as classes in public schools also begin and many private school students were expected to transfer.”
According to a Cocopea survey, more than 80 percent of respondents reported that the economic difficulties of students and their families, and the resulting migration to public schools, state and local universities and colleges are the main drivers of the decline in enrollment. More than 250 member schools participated in the survey.
“To cope with the steep decline in enrollment, 71 percent of respondent schools are considering the implementation of a ‘no work, no pay’ scheme,” the survey revealed. About 64 percent are considering the retrenchment of employees to remain afloat, the survey results bared.
In addition, 55 percent in the survey are considering closing their schools. These closures would be in addition to the 865 private schools that suspended their operations last school year, as reported by the Department of Education.
More lay-offs
REP. Joey Salceda, chairman of the House Committee on Ways and Means, earlier said the income tax increase sought in RR 5-2021 represents about 5.72 percent of compensation income. Salceda said applying the tax hike could force the already dwindled private education labor force to shed another 21,661 from the 378,637 jobs in the private schools.
On the other hand, applying the Create rate of 1 percent until 2023 would allow these schools to save an equivalent of 3.43 percent of compensation expenses, which could help them rehire at least 12,996 teachers at the start of this school year, the lawmaker has said.
To survive from the health and economic crisis, the private education sector has initiated all possible measures for the continuity of school operations, Cocopea and Pacu officials said.
“It is amidst these dire circumstances, and the country’s ongoing learning crisis, that we renew our appeal for the immediate passage of this most important legislative intervention, SB 2272, so that our member educational institutions can give full focus to delivering quality education for our learners, who we must develop to be the future leaders and workforce of our country,” the private school associations said.
Complementary role
THE Cocopea and Pacu said through Tamayo and Estrada that “the country’s human capital depends on the quality of education our learners receive from both public and private educational institutions.
“This is a complementary role that must be strengthened and will prove critical for recovering from the pandemic, and sustaining Philippine economic growth and global competitiveness,” the organizations added.
The private school groups said that “cognizant of the tight timeline,” SB 2272 will be passed into law this month before Congress goes on a break in October for the filing of candidacies for the 2022 national elections.
“The millions of stakeholders of the private education sector and the linked ecosystem that depend on the continuity of our schools, would be deeply grateful to the Senate for its swift and conclusive correction of RR 5-2021’s erroneous interpretation of the Create Act, which the Senate and the House clearly intended to provide relief to the private school sector amidst the devastating pandemic,” they concluded.