X
UCA News

Philippines

Catholic schools in Philippines condemn huge tax hike

New tax law threatens to drive many private educational institutions to the wall, Catholic school association says

Catholic schools in Philippines condemn huge tax hike

Catholic private schools in the Philippines are bitterly opposed to a new law that they say seeks to impose a huge tax hike that could force many of them to close. (Photo: Pixabay)

Catholic private schools in the Philippines have criticized a new law that heavily taxes privately owned educational institutions.

The Catholic Educational Association of the Philippines (CEAP), a group composed of 1,500 Catholic schools, called on June 1 for an “immediate” review of the law.

The new law, known as the Corporate Recovery and Tax Incentives for Enterprises or CREATE Act, will mean an increase in the tax rate of private educational institutions from 1 percent to 25 percent.

Subscribe to your daily free newsletter from UCA News
Thank you. You are now signed up to Daily newsletter

“The imposition of the new tax law, especially during a deep economic recession, will penalize, marginalize and discriminate against private education institutions with unfeasibly higher taxes that may force financially distressed schools to close down and trigger a radiating wave of economic disruption,” the group said in a statement.

It also labeled the new law “damaging and discriminatory” for imposing “unconscionable” tax rates on private education at a time when schools were struggling to survive during the pandemic.

“Implementing this new law is devastating considering the key role that private schools play in tackling the ongoing learning crisis that will impact our country’s ability to generate jobs for decades to come and the severe financial stress they are enduring as a result of the pandemic,” the group added.

Where will private schools get their source of income but from tuition fees? 

The association announced the closure of at least 10 of its member schools at the end of last year.

Among them was the 107-year-old College of the Holy Spirit Manila, a school ran by the Mission Congregation of the Servants of the Holy Spirit.

The association blamed an increasingly challenging environment faced by private schools resulting from government policies, especially during the Covid-19 pandemic.

This has been seen in the reduction or loss of family incomes, mobility restrictions and social distancing requirements, plus the new demands of distance learning.

The CEAP warned that many other private Catholic schools will fold if the government keeps the new tax law, causing parents to transfer their children to government schools that offer a poorer quality of education.

Catholic parents fear much higher taxes will result in higher tuition fees.

“Where will private schools get their source of income but from tuition fees? My husband was retrenched from his work. We are doing our best to send our child to school but with this new tax law, I guess we will transfer our child to a public school,” said one parent in Manila Estrelita Diones.

Also Read

UCA News Podcast
UCAN Ad
 
Living Church - Contribute to help UCA News
Living Church - Contribute to help UCA News
UCA News Catholic Dioceses in Asia
UCA News Catholic Dioceses in Asia
UCA News Catholic Dioceses in Asia