Angara backs tax breaks to ease burden on schools, educ partners

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MAKATI CITY, 8 April 2026—Education Secretary Sonny Angara on Wednesday underscored the vital role of existing tax incentives in helping schools and private partners manage rising fuel, transport, and operational costs amid the conflict in the Middle East.

According to Angara, these fiscal measures serve as a crucial buffer, allowing schools to sustain investments in quality education despite prevailing economic pressures.

 

“Aligned with President Bongbong Marcos’ 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,” Angara said.

“By reducing tax burdens, they help cushion the impact of rising costs and sustain continued investment in education,” he added.

According to the Department of Education (DepEd), non-stock, non-profit educational institutions remain exempt from income tax on revenues, provided these funds are used directly and exclusively for educational purposes.

Proprietary schools, meanwhile, continue to benefit from a preferential income tax rate of 10% under specific statutory conditions.

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

Angara highlighted other cost-mitigating measures, including tax- and duty-free importation of books and educational materials to offset rising logistics and shipping expenses.

Schools also benefit from tax credits for VAT paid on renewable energy equipment, which can be applied against income tax liabilities and support lower long-term operational costs.

President Marcos’ administration also reaffirmed its support for private sector participation in education through the Adopt-a-School Program, where donations are eligible for 150% deductibility.

Depending on the structure of the transaction, donations may also be treated as VAT-exempt or as a VATable “deemed sale,” with the corresponding entitlement to input VAT credits.

Under the Tax Code, donations may also be exempt from donor’s tax, provided they meet administrative use limitations to ensure resources are directed toward educational purposes.

Registered business enterprises (RBEs) donating capital equipment to government agencies, state universities, or DepEd-accredited schools may also qualify for exemption from donor’s tax and customs duties.

For companies investing in workforce development, DepEd said enterprises can avail of a 150% deduction on training expenses. This deduction is set to increase to 175% starting January 1, 2028.

Similar to schools, donors may also benefit from duty- and tax-free importation of educational materials intended for donation.

While these incentives offer a significant cushion, Angara reminded stakeholders of proper documentation, registration and compliance with regulatory requirements.

He added that DepEd remains committed to working closely with the private sector to ensure quality education remains accessible amid global inflation.

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