- July 04, 2017 16:52
Several private schools, including Far Eastern University (FEU), stood in solidarity with the Coordinating Council of Private Educational Associations (COCOPEA) to demand an amendment from the Bureau of Internal Revenue (BIR) with its recent provision of the Revenue Regulations No. 5-2021 (RR 5-2021) which mandates an increase of tax rates on private educational institutions.
In COCOPEA's statement released June 1, the association stressed that the 10% to 25% tax increase will only cause "irreparable damage to the institutions and stakeholders" and "further impose a burden to the private education sector" considering that the universities are still in distraught after its transition to online classes.
According to the Department of Education (DepEd), around 900 private basic educational institutions have closed for the Academic Year 2020-2021 while the enrollees in K-12 schools dropped by 900,000—leaving a devastating decline in the education sector.
On the other hand, the Philippine Association of Colleges and Universities (PACU) in April reported that there's a 10-50% decline in the enrollment of most institutions in higher education.
With the data given, COCOPEA believes that it would be impossible for these private schools to recover without the government's financial support.
"RR 5-2021 is ill-conceived and insensitive to the realities of the private education sector," the statement read, as it may hamper the distribution of scholarships, loans, and reduced fees to the students.
Further, it imposes a risk of losing jobs and decreasing salaries and benefits on the university personnel and other businesses surrounding the schools.
The statement also emphasized that the grounds of RR 5-2021 highly counter the provisions of the recently signed Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act which reduces the preferential tax treatment from 10% to 1% and the financial requisites of foreign and domestic companies, including the educational institutions.
In addition, the association believes that the regulation refutes the mandates of the Constitution's Article XIV, Sec. 4(3) which exempts the assets of non-profit educational institutions used for its primary purposes from taxes and other duties.
Since the provisions of RR 5-2021 cannot amend the Constitution, the executive branch should reconsider and modify the issuance and its terms.
According to COCOPEA, they have already sought the attention of BIR and the Department of Finance (DoF). However, its call for an urgent response remains pending thus propelling them to release a public request.
The statement, then, appealed to the lawmakers to immediately amend RR 5-2021 and "exercise their taxing power with fairness and equity, and in accordance with both the CREATE Act and the Constitution."
As of writing, Associations of Catholic and Technical-Vocational (Tech-Voc) schools and other Metro Manila private tertiary institutions such as Adamson University (AdU), National University (NU), and Mapúa University have also released their statements regarding the issue.
Founded in 1961, COCOPEA is the country's leading association that unifies the private education sector, securing the development of its 2,500 member colleges, universities, and tech-voc institutions.
-Mary Licel Biscocho
(File photo from Raymond de Dios/FEU Advocate)