A Draft Bill: OneLearning Philippines 18.0

A qualified learning company owned by a qualified school shall be eligible for income tax holiday of up to 40% or the actual percentage of common equity whichever is lower.

Definitions (See also Posts #9, #11, #12 & #17):

A qualified learning company is one that is more than 60% Filipino-owned and engaged in STI- or DUI-learning business activities. It must be registered with the SEC and BOI for the purpose of earning the incentive. It is listed in the Philippine Stock Exchange with a minimum 40% free float.

A qualified school is any learning institution that is more than 60% Filipino-owned, duly registered with the SEC and Department of Education or TESDA. It is listed in the Philippine Stock Exchange with a minimum 40% free float. Investments with incentives under this law shall not be more than 50% of the total assets of the school.

Purpose of the Bill:

To shift the entrepreneurs’ pay-off table, increase investments in education by Filipinos, reconnect the dual economy, boost factor accumulation quickly, and encourage learning and competence building. Benefits of the Bill:

1. The bill acknowledges that learning is key to development. It strengthens the schools financially. It boosts business-academe linkage. (Posts #12, #17)
2. The bill helps re-connect the “dual economy” – the gap between the export and local sector. (Post #12)
3. It improves learning-by-doing and competence building from more interaction and normal trade among firms in the country. (Post #17)
4. The bill improves the competitiveness of local companies to those located in export processing zones and those in other countries in the region. It expands factor accumulation quickly. (Posts #11, #17).
5. The bill spurs the listing of successful privately owned Filipino companies. It puts them under the scrutiny of investors and established regulatory institutions. (Post #9)
6. The bill bolsters the countervailing powers of the investment community through existing channels like the stock exchange and the government institutions. (Post #9)
7. The bill deepens the capital markets. It builds Filipino participation in the stock market.
8. The bill shifts the pay-off table to favor innovation, entrepreneurship and eventually technical progress. (Post #9)
9. From these benefits, the bill raises total effective revenue despite the tax holiday.

I felt like Synthesist-on-steroids, brewing furiously, as I wrote this post. This is one reason why people publish blogs, they are also writer and editor. I wrote it as a mind opener. It’s a win-win for all though the Secretary of Finance may not agree with Benefit #9.

P.S. I think the university owners will give it a serious look: Mr. Lucio Tan of UE, Mr. Alfonso Yuchengco of Mapua, Mr. Henry Sy of National University, Mr. Ramon del Rosario of the UPangasinan and UIloilo, the La Salle Brothers and the Jesuits and Dominicans, among others.