Uphold the Pro Education Spirit of the CREATE ACT and the Constitution
Dear Mr. President,
On behalf of the Coordinating Council for Private Educational Associations (COCOPEA), the umbrella organization of 5 major Private School associations: the Philippine Association of Colleges and Universities Inc. (PACU), Catholic Educational Association of the Philippines (CEAP), Philippine Association of Private Schools, Colleges, & Universities (PAPSCU), Association of Christian Schools, Colleges, and Universities (ACSCU), Technical Vocational Schools Association (TVSA), and other Private School associations: Davao Colleges and Universities Network Inc. (DACUN), Association of Private, State Colleges, Universities in Region XI (APSCUR XI), Association of Cebu Private Schools (CESAFI), Bicol Association of Private Colleges and Universities (BAPCU), National Alliance of Private Schools Philippines Inc. (NAPSPHIL) and thousands of educational, parent, alumni and employee associations from around the country, we respectfully seek your help in correcting the errors in the BIR’s Revenue Regulation RR 5-2021, which directly contradicts the provisions and the spirit of both the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) and the Constitution.
Whereas CREATE, Congress and your Administration sought to shore up proprietary educational institutions during the pandemic with a much-appreciated temporary reduction in the tax rate from 10% to 1%, RR 5–2021 will instead cause irreparable damage to the institutions that you sought to help, by more than doubling their tax rate by 150%, from the 10% that has been applied to them since 1968, to 25%.
Simply put, RR 5-2021 will severely harm the schools, parents, students, teachers, employees and, other stakeholders in the private education sector, which is a large and vital partner of the government in providing quality education nationwide. Currently, there are over 6.1 million students enrolled in almost 15,000 private educational institutions across the country, based on CHED and DepEd data. The current faculty and staff of the private educational institutions total over 400,000.
The erroneous provision of RR 5-2021 will add a heavy additional burden to the many stakeholders of the private education sector, at a time when we are already fighting for our survival. Our sector has not yet recovered from the debilitating effects of the K-12 Law, and is in the midst of struggling with the steep drop in enrollment caused by the pandemic. RR 5-2021 will be the straw that breaks the camel’s back.
Many individuals will be directly affected by RR 5-2021, such as our students, academic, athletic, working students and needs-based scholars, the parents and our faculty and staff. Members of the communities built around schools, such as school uniform sewers, cafeteria workers, carinderias, sari-sari stores, dormitories, janitorial/security services, school bus drivers/helpers, bookstores, book suppliers, and informal businesses around the campuses, will also be severely affected.
In the last five years, your Administration has mounted many initiatives that have made education more accessible and affordable by strengthening the complementary roles of the public and private education sectors in an integrated education system.
The enactment of your landmark and widely hailed Universal Access to Quality Tertiary Education Act (RA 10931), the Tulong Dunong Program, and the educational assistance programs under the Bayanihan 2 such as the Bayanihan 2 for Higher Education Tulong Program (B2HELP), the CHED-DOLE Tabang OFW Program, and the GSIS and Landbank Educational Loan Programs, have all contributed significantly to making private education accessible to students, especially the underprivileged.
Mr. President, we thank you wholeheartedly, for all your efforts to help the poor. You have truly earned your place as a staunch champion of education by providing access to quality education for deserving students who cannot afford it.
However, the benefits of your legacy could very well be canceled by RR 5-2021. We appeal to you, Mr. President, to make our tax laws consistent with your vision and the constitutional mandate of ensuring access to education for all Filipinos. Specifically, RR 5-2021 unilaterally and illegally inserted wording inconsistent with both Section 27 (B) of the Tax Code as amended by CREATE, and the Constitution.
We appeal for your intervention because we have exhausted all other administrative avenues by requesting various government offices, including the Bureau of Internal Revenue and the Department of Finance, to revisit and reverse those provisions of RR 5-2021, to no avail. This will cause irreparable harm to the private education sector and its many stakeholders.
We come to you Mr. President as the final arbiter for administrative remedy and the ultimate protector of our many stakeholders. We know how much you value education and its key role in alleviating poverty.
We hope and pray that you can correct this egregious injustice.