Press Release - EDCOM 2: Since 1996, no one has availed of tax incentives under the Dual Training System Act and Adopt-A-School law - TESDA

The Second Congressional Commission on Education (EDCOM 2) found that, since 1996, no single entity has availed of tax incentives under the Dual Training System Act (RA 7686) and Adopt-A-School Law (RA 8525), according to the Bureau of Internal Revenue.

Enterprise-based training refers to Technical-Vocational Education and Training (TVET) programs delivered in the enterprise which may be in-plant or stand alone, or may be linked with a training provider. These programs are offered to industry groups or to enterprises' employees and individuals.

The discussion, held at UP BGC on February 21, 2024, focused on the incentives available related to enterprise-based training, and was joined by representatives from the Bureau of Internal Revenue (BIR), Philippine Council of NGO Certification (PCNC), Bureau of Customs (BOC), and the Technical Education and Skills Development Authority (TESDA).

Dismally low uptake of enterprise-based training

As highlighted in the EDCOM Year One Report, "Miseducation: The Failed System of Philippine Education", EBT and apprenticeship programs remain the least popular modality in TVET. This is despite its efficacy in providing skills and guaranteeing superior labor market outcomes for graduates, and despite the strong emphasis placed by the first EDCOM and by TESDA itself.

"In fact, in 2022, [EBT] accounted for only 9% of total TVET enrollment (TESDA Information and Communications Technology Office, 2023). On the other hand, enrollment in institution-based and community-based training (shorter-term skills training that does not necessarily lead to certification) accounts for the bulk of TVET enrollment.", the EDCOM Year One Report read.

Unclear guidelines and cumbersome process to avail of tax incentives

"Enterprises we have consulted have mentioned that they are unsure of how to avail of the incentives [for organizations who conduct EBT], the lack of guidelines in availing of the exemptions from taxes and duties, and that these incentives are very tedious to access", EDCOM 2 Executive Director Dr. Karol Mark Yee said.

Under the Dual Training System Act of 1994 (RA 7686), 50% of the actual expenses paid by the private enterprise for each