“Nobody needs more taxes. What we need are good governance and real solutions.”
The controversy sparked by the onerous provisions of the Bureau of Internal Revenue’s RR 5-2021 has enraged the whole private educational sector, a strategically critical ecosystem that affects not just the direct stakeholders of private educational institutions but thousands of linkages with small and medium enterprises that benefit from the business operations of schools. If implemented, this would slap a 150-percent increase in the income tax of private schools and would cause long-term consequences to our whole educational system.
Responding to the loud protests of an already struggling sector, several lawmakers have called for the revocation of the “erroneous” revenue regulation with both Houses of Congress convening special hearings and filing bills to rectify what Senator Franklin Drilon called “a classic case of legislation by IRR (Implementing Rules and Regulations).” That was a valid rebuke as the power to legislate taxes is the exclusive mandate of the House of Representatives.
House of Representatives Committee on Ways and Means Chairperson Joey Salceda, Deputy Speaker Rufus Rodriguez, Rep. Kiko Benitez, Rep. Luis Villafuerte, filed their corrective bills while supportive House Resolutions were filed by Rep. Mark Go, and Rep. Joy Tambunting. Not even a week after sessions started after the SONA, the consolidated bill has been passed on 2nd reading. For a bill not certified as urgent by the President, this is a rare demonstration of urgency from the legislators that deserve recognition. There are now 68 co-authors of the bill which Majority Floor Leader Martin Romualdez vowed to prioritize, and House Speaker Lord Allan Velasco has committed to support. More co-authors are expected to sign-on which will hopefully be passed on third reading when sessions resume after the ECQ lockdowns.
In the Senate, counterpart bills were likewise filed by Sen. Juan Edgardo “Sonny” Angara and co-authored by Senators: Joel Villanueva, Ralph G. Recto, Senator Juan Miguel “Migz” F. Zubiri, Maria Lourdes Nancy S. Binay, Win Gatchalian, Grace L. Poe, Richard J. Gordon, Francis “Kiko” N. Pangilinan, Risa Hontiveros, Emmanuel “Manny” D. Pacquiao, Ramon Bong Revilla Jr., Cynthia A. Villar, and Leila M. De Lima. Ways and Means Chairperson Pia Cayetano also convened a special hearing during the break and has committed to the fast passage once the amending bill of the House of Representatives has been transmitted to the Senate.
A national alliance of private school groups under the Coordinating Council of Private Educational Associations (COCOPEA), the Philippine Association of Colleges and University (PACU), Davao Colleges and Universities Network, Association of Private, State Colleges, and Universities in Region XI, Bicol Association of Private Colleges and Universities, CESAFI Association of Cebu Private Schools, in recent public statements expressed their gratitude to the growing number of legislators heeding the appeals of the crisis battered schools.
COCOPEA Managing Director and spokesperson Atty. Joseph Noel M. Estrada said, “Nevertheless, while this latest development is a step forward, the suspension is merely temporary, and, we cannot lose sight of our main objective of pushing for a law to finally remove any doubt as to the right of proprietary educational institutions to the preferential tax rate of 10%, which has been in the Tax Code since 1968, and the concessionary tax rate of 1% for three years under the CREATE Act, to provide temporary relief during the pandemic.”
Chairman of COCOPEA and concurrent Philippine Association of Colleges and Universities President and A, Dr. Anthony Jose M. Tamayo emphasized the urgency of these corrective legislation as schools are about to start classes this September to address the confusion that the conflicting policies are causing and to alleviate the precarious state of the private education sector consequent to the pandemic crisis.
COCOPEA stressed that, “It is critical that the bills be passed as soon as possible before the new school year starts in September. This will allow the private education sector to focus all of our time and resources on our highest priority, the very grave learning crisis that our country is now struggling with, rather than on correcting erroneous interpretations of the law and the Constitution.”
This issue has crossed sectoral and political lines with civil society and business groups joining what has now become a multi-sectoral push to revoke RR 5-2021. The responsiveness of the legislators shows how important close consultations with stakeholders are critical in crafting public policy which should be nurtured and harnessed by bringing together the best expertise to avoid policy blunders.
There is no rationale to justify the re-interpretation of the constitutionally mandated preferential tax rate of educational institutions. Nobody needs more taxes. What we need are good governance and real solutions that would get us out of this protracted health and economic disaster.