‘Tax breaks shield schools from rising costs’ – Angara

Education Secretary Sonny Angara emphasized the importance of existing tax incentives in helping schools and private education partners cope with rising operational expenses driven by global economic pressures and instability in the Middle East.

Angara said these fiscal measures act as a buffer that allows the education sector to continue investing in quality learning despite increases in fuel, transport, and logistics costs.

“Aligned with President Ferdinand Marcos Jr.’ priority to shield education from economic volatility, these incentives enable schools and their partners to maximize limited resources and free up funds for teaching and learner support,” he said.

The Department of Education (DepEd) clarified that non-stock, non-profit educational institutions remain exempt from income tax on revenues, provided funds are used solely for educational purposes, while proprietary schools continue to enjoy a preferential 10-percent income tax rate.

To further ease the burden on families, tuition and other educational services remain exempt from the 12-percent value-added tax (VAT).

Angara also pointed to additional cost-reduction measures, including duty-free importation of books and learning materials, as well as tax credits for schools investing in renewable energy systems to reduce long-term utility expenses.

The administration continues to support private sector participation through the Adopt-a-School Program, where eligible donations are granted a 150-percent tax deductibility. In certain cases, these may also be exempt from donor’s tax and VAT.

Companies investing in workforce development may also claim a 150-percent deduction on training expenses, which is set to increase to 175 percent by January 1, 2028.

Registered business enterprises donating equipment to government agencies, state universities, or DepEd-accredited institutions may likewise qualify for exemptions from donor’s tax and customs duties.

While these incentives provide significant financial relief, Angara reminded stakeholders to ensure proper documentation and compliance with regulatory requirements.

He added that DepEd will continue strengthening partnerships with the private sector to keep education accessible despite ongoing inflationary pressures.