Metro Manila (CNN Philippines, June 14) — A House of Representatives committee has approved a bill that will undo what it calls a “cruel punishment” for private schools in the hands of the Bureau of Internal Revenue (BIR).
The House Committee on Ways and Means stepped in with a substitute bill to clarify BIR Revenue Regulation 5-2021 subjecting private educational institutions to a 25% income tax, when the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act signed in March reduced the tax rate to these schools to just 1% from July 2020 until June 30, 2023.
Lawmakers said the pandemic led to lower enrollees and tuition fee collections, which forced schools into bankruptcy.
“The increase in the taxation of proprietary educational institutions is a serious and urgent concern not only for me, but for the entire educational institutions especially considering the severe impact of the pandemic on the current financial position on private schools all over the country,” Baguio City Representative Mark Go said during the Monday morning hearing.
Cagayan de Oro City Rep. Rufus Rodriguez also called out the “erroneous interpretation” of the BIR on how to tax proprietary educational institutions by lumping them with hospitals.
Around 800 private schools have shut down since the local COVID-19 outbreak forced learners to resort to distance learning in March 2020.
The Coordinating Council for Private Educational Associations earlier asked President Rodrigo Duterte to stop the implementation of the tax policy.
Albay Representative Joey Salceda, the committee chairman, added that collecting just a 1% tax on private schools will allow the re-hiring of 12,996 teachers, while charging a 25% tax rate could force schools to let go of over 21,661 educators and staff.
The bill still needs to go through plenary approvals in the House and secure subsequent approvals from the Senate.
READ: Senators to BIR: Withdraw income tax hike on ‘distressed’ private schools
