Solons wrangle over school tax

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By Mario J. Mallari
and Elmer Navarro Manuel

But if your quality is suffering and your students are not really getting the value of their investment in your school, it should not be encouraged.

At least two senators rejected the imposition of additional taxes on educational institutions and hospitals which is among the provisions of the new tax reform measure being pushed.

Senate President Vicente Sotto III, who filed Senate Bill 1906 which is a counterpart bill of the government-backed Tax Reform for Acceleration and Inclusion (TRAIN) 2, said he will exclude such provision.

“If there are (provisions like that), I will remove them,” Sotto said.

Quirino Representative Dakila Cua, however, said the proposal aims to instill discipline as the need for quality education in the country increases.

Cua, who also chairs the House ways and means committee, said the schools are currently taxed 10 percent of their earnings, but under the second package of the tax reform law, these will be “eased” to a 15-percent tax rate in 2021 if they do not meet the standards.

Higher levy
on water districts
Apart from imposing at least 10 percent taxes on educational institutions and hospitals, the proposed measure also seeks additional tax from water districts.

“Those are among the unclear provisions. There will be debates on that,” said Sotto.

Sen. Sonny Angara, for his part, said that imposing new taxes at this time would not be advisable – citing the rising inflation.

“With the current inflation rate which is projected to go higher, it may not be advisable to raise the tax rate for schools, hospitals or utilities because they will almost surely pass on the cost to students, patients and consumers,” said Angara, chairman of the Senate ways and means committee.

With no senators filing a counterpart bill for TRAIN 2 in the Senate, Sotto filed Senate Bill 1906 last week after meeting with Undersecretary Karl Chua of the Department of Finance.

Sotto said that it is better to have the measure subjected to debates by senators.

Discipline needed
“The objective here is to put some discipline,” said Cua in a television interview. “If your school is performing, you have the right set of faculty with masteral degrees and it’s improving, then you should enjoy the 10 percent by all means.”

“But if your quality is suffering and your students are not really getting the value of their investment in your school, it should not be encouraged,” he said, adding that its closure is the “eventuality.”

The lawmaker also explained that revenue from the higher tax will be returned to stakeholders as student vouchers and the same taxation measures will be imposed on private hospitals.

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