Palace supports tax rate hike on private schools amid group’s plea

by Christian Deiparine (Philstar.com), 10 Jun 2021

MANILA, Philippines — The Duterte administration on Thursday backed a new policy that would hike private schools’ tax rate to 25% amid the pandemic, despite a group appealing for the president’s help.

Some 600 private education stakeholders had petitioned to President Rodrigo Duterte to intervene on the Bureau of Internal Revenue’s RR 5-2021. They warned it will hurt schools already struggling due to COVID-19, and lead to more closures, as well as loss of jobs for employees and scholarships for students.

“We come to you Mr. President, as the final arbiter for administrative remedy and the ultimate protector of our many stakeholders,” read the June 4 petition by the Coordinating Council of Private Educational Associations. “We hope and pray that you can correct this egregious injustice.”

But in a regular briefing, presidential spokesperson Harry Roque said they are for Finance chief Sonny Dominguez’s position to keep the BIR policy intact.

“We support the position of the Secretary of Finance,” said Roque in mixed English and Filipino, “that the BIR’s interpretation that 100% of non-profit schools’ earnings should go to no other purpose than for the school, is pursuant to the CREATE law and pursuant to establish jurisprudence.”

COCOPEA has questioned the RR 5-2021 before the Court of Tax Appeals and has sought for a temporary restraining order on its implementation.

The group comprising five major educational associations in the country said the policy is against the CREATE law, which gave a temporary income tax reduction to schools in the next three years.

That position, while now without Palace backing, has found traction and support among lawmakers from both chambers of Congress.

Senators have called on the BIR to rescind its policy, with one urging the agency to “have a heart” during a health crisis.

Measures have since been filed seeking to amend the country’s tax code and include proprietary schools to avail of the said relief from CREATE law — one in the Senate by finance committee chairperson Sonny Angara, and another in the House by Rep. Joey Salceda (Albay).