It’s the period for real property tax (RPT), payments are once again being collected by local government units (LGUs). This tax is due on or before the 31st day of January each year if paid annually, and on or before March 30, June 30, September 30 and December 31 of the year if paid quarterly. Most people do not know that the Special Education Fund (SEF) is being collected simultaneously with RPT. The SEF is an additional 1 percent tax imposed by LGUs on the assessed value and levy of real properties. The RPT is 1 percent of the assessed value of the property in the provinces and 2 percent in Metro Manila. So, effectively, if your property is outside Metro Manila, your RPT is being doubled because of the SEF levy.
As envisioned by Congress, the SEF would fund projects to enhance the government’s education programs. Effectively, property owners are helping fund local government units with education programs as LGUs have the authority to appropriate and disburse such funds. Unfortunately, though, the SEF has been exploited by some LGU officials for their personal gains. Created by virtue of RA 5447 or the “Act Creating a Special Education Fund to be Constituted from the Proceeds of an Additional Real Property Tax and a Certain Portion of the Taxes on Virginia-type Cigarettes and Duties on Imported Leaf Tobacco Defining the Activities to be Financed, Creating School Boards for the Purpose and Appropriating Funds Therefrom”, the SEF has not only been politicized, but the subject of several corruption charges filed against local government officials at the Office of the Ombudsman as well.
Since the enactment of RA 5447, trillions of pesos have already been collected by LGUs for their SEF through the real property tax scheme. However, a significant amount of these funds have been misused by some local government officials.
For instance, the Commission on Audit (COA), after conducting an audit on an LGU in Pampanga, found that only P13,460,315.97 or 23.1 percent of an LGU’s SEF was incurred on expenses authorized under RA 7160, while P44,786,660 was spent for unauthorized expenditures. According to the breakdown of expenses provided in the report, the sum of P26.223 million was released as “other bonuses and allowances.” The COA also declared as irregular the payment of P9.712 million for electricity bills, P4.226 million for water usage, and P3.75 million charged as “training expenses.” Only a measly sum of P117,387 was declared spent for the “repair of a school building”, but verification showed the amount was paid for the purchase of various electrical materials delivered to a school in Angeles City. And of the P3.75 million in “training expenses,” auditors traced P3 million being utilized for “food and hotel accommodations” at an international hotel during an induction program conducted by said LGU.
The law is very specific on where the SEF can only be spent. Among those are, for the organization and operation of extension classes whenever needed, construction and repair of school buildings, including the acquisition of school sites, payment and adjustment of salaries of public school teachers under and by virtue of RA 5168 and all the benefits in favor of public school teachers provided under RA 4670, purchase and/or improvement, repair and refurbishing of machinery, laboratory, technical and similar equipment and apparatus, including spare parts needed by the Bureau of Vocational Education and secondary schools offering vocational courses, the undertaking of education research, including that of the Board of National Education and the granting of government scholarships to poor but deserving students under RA 4090 among others.
Meanwhile, education officials are reminding and urging their local officials to refrain from using the SEF for programs to finance unauthorized purposes. Local officials should prioritize spending their SEF on projects that will improve the standard of education, the education officials said.
According to University of the Philippines College of Education Dean Dina Ocampo Cristobal, some local officials distribute school supplies and bags bearing their names to students during the opening of classes. “We must shield education from politics,” Cristobal said during a short TV interview.
I have called on concerned government agencies before to conduct a thorough review and audit of SEF funds. But my voice seems to have fallen into deaf ears. I have yet to see real change in the handling of SEF by LGUs.
It would be best that Congress now consider amending the law that allows LGUs to collect SEF. Education has already the biggest allocation in the current year’s General Appropriations Act (GAA). And in the meantime, collection of SEF by LGUs can be suspended while an amendment to RA 5447 is being worked out. This would not only stop the corruption of SEF, but it would also reduce the annual real property taxes, and reduce the burden of property owners.
Education is among the basic foundations to help spur economic prosperity. It is where the country’s professional and technology bases are developed. Fortunately, we now have a president who understands the urgency to keep our quality of education and technology competitive with that of the Asean community and the world.
President Rodrigo Roa Duterte’s 2017 government budget reflects his priority for education by giving the Department of Education (DepEd) the biggest slice at over P545 billion. Thus, even without the SEF, DepEd’s comprehensive education program should be able to address the requirements of LGUs.
We have seen dramatic changes in the country even during the first semester of Duterte’s presidency. Our people are closely watching the changes and reforms being undertaken by the new administration in the education sector. The reforms are crucial. For, after all, as the legendary Nobel Prize and Bharat Ratna awardee former South African President and anti-apartheid activist Nelson Mandela once said, “Education is the most powerful weapon which you can use to change the world.”
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Dr. Arranza is the chairman of the Federation of Philippine Industries and Fight Illicit Trade, a broad-based, multi-sectoral movement intended to protect consumers, safeguard government revenues and shield legitimate industries from the ill effects of smuggling.