Manila: Education Secretary Sonny Angara on Wednesday emphasized the essential role of existing tax incentives in assisting schools and private partners to handle increasing operational costs amid global economic pressures and the ongoing conflict in the Middle East.
According to Philippines News Agency, Angara noted that these fiscal measures act as a crucial buffer, enabling the education sector to sustain investments in quality learning despite the rise in fuel, transport, and logistics expenses. He stated that these incentives align with President Ferdinand Bongbong Marcos' priority to protect education from economic volatility, allowing schools and their partners to maximize limited resources and allocate more funds for teaching and learner support.
The Department of Education (DepEd) clarified that under current laws, non-stock, non-profit educational institutions remain exempt from income tax on revenues, as long as the funds are used exclusively for educational purposes. Proprietary schools also continue to benefit from a preferential 10-percent income tax rate. To alleviate the financial burden on Filipino families further, tuition and educational services remain exempt from the 12 percent value-added tax (VAT).
Angara also pointed out cost-reducing measures such as the duty-free importation of books and educational materials, along with tax credits for schools investing in renewable energy equipment to reduce long-term utility costs. The administration also reiterated its support for private sector participation through the Adopt-a-School Program, where donations are eligible for a 150-percent tax deductibility. Under specific conditions, these donations may also be exempt from the donor's tax and VAT.
For businesses investing in workforce development, DepEd mentioned that companies could currently avail themselves of a 150 percent deduction on training expenses, an incentive set to increase to 175 percent starting January 1, 2028. Registered business enterprises donating capital equipment to government agencies, state universities, or DepEd-accredited schools may also qualify for exemptions from donor's tax and customs duties.
While these incentives offer a significant financial cushion, Angara reminded stakeholders to ensure proper documentation and strict compliance with regulatory requirements. He added that DepEd remains committed to strengthening its collaboration with the private sector to ensure that quality education remains accessible despite global inflationary trends.
