No to Taxes on Senior High School Voucher Income

Admittedly, the voucher system mitigates the adverse effects of the K-12 reform on some educational institutions. Private HEIs, adversely affected by non-enrollment due the the K-12 law, are able to offer SHS through the voucher system.

But the vouchers are not just about saving private HEIs from losses during a State-initiated reform period. They are about insure private sector participation in SHS provision which is on the whole good for the SHSs and good for their students.

Participation of the private sector in providing senior high school education to public school students in partnership with the provision of the DepEd instantiates the complementariness between public and private schools that is recognized by the Constitution as necessary for the State, first, to provide free basic education to all (par 2, sec 2, Art XIV), and second, to provide a complete, adequate and integrated system of education that is accessible to all Filipinos (par 1, sec 2, Art XIV). This accessibility is not merely a spatial concept; it is financial.

Senior High School is part of basic education. In general, the State should provide it free.

In providing this fee senior high school, the State partners with the private sector, now through the voucher system. The value of the voucher is based on the replacement cost of public provision in a given locality. There is no quarrel with that. But the replacement cost of public provision is in many cases different from the actual cost of provision of private schools where the costs for acquiring and maintaining and developing competent faculty, staff and administrators, adequate libraries, usable laboratories, appropriate facilities are generally higher than the value of the voucher, especially as this value varies geographically which may not be the case in the private schools.

The participation of the private sector in this partnership, despite higher costs of delivery for most of the private sector, lessens public expenditure for the same provision which would otherwise be its Constitutional burden.  The partnership benefits students choosing to go to private senior high schools from public junior high schools.

In this context, the State should not burden its private sector partners with taxes on voucher income. On the contrary, since the private schools offer senior high school for the equivalent of the cost of public school provision (i.e., the SHS vouchers) with value-added in private-quality instruction, character formation, facilities, etc., that students may freely choose without further burdening the State, the State should assist the schools, be they non-stock-non profit or for profit, in performing their educational functions under the partnership. Certainly, taxes on income coming from the vouchers should be abrogated, considering that there is no tax in the cost on public school provision, which is the basis of the voucher value, and considering that the vouchers support activity actually directly and solely used for senior high school education – which the State must provide for all free. This exemption from tax should be applicable to all private sector partners in providing senior high school, regardless of whether for profit or non-profit, and regardless of whether the schools requires a top up or not, since the public sector is freed through the participation of the private school of itself needing to provide that education.

The Constitution not only recognizes the complementariness of the public and private schools in the State’s provision for the Philippines of a system of education, it also recognizes the crucial role the private sector plays in national development. “The State recognizes the indispensible role of the private sector, encourages private enterprise, and provides incentives to needed investments” (sec. 20, art II)

The terms of partnership between public and private schools in providing senior high school (and, certainly, other levels of Philippine education) should be better articulated not just from the viewpoint of private-school interests, nor just from the viewpoint of public-school interests, but from the higher viewpoint of the “complete, adequate and integrated system of education relevant to the needs of the people and society” (par 1, sec 2, art XIV) that the Constitution mandates. In this articulation a healthy complementation between broad highly-regulated educational systems targeting maximized access might be appreciated vis-a-vis the creativity and innovativeness of educational institutions that are small, pliant, and creative. Also, through their complementation, the vulnerability of public schools to political interference might be checked by quality assurance freely exercised with the private sector; the increasing cost of public education might be checked by the cost of private provision, and vice versa.






About Joel Tabora, S.J.

Jesuit. Educator
This entry was posted in Philippine Educational Reform and tagged , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s