House bill seeks amendment to tax code for private schools

(Philstar.com), 10 Jun 2021

MANILA, Philippines — Rep. Joey Salceda (Albay) on Thursday proposed an amendment to the National Internal Revenue Code in a bid to resolve private schools’ woes on a new policy that would hike its tax rate to 25%.

Private educational institutions have taken to court to stop the implementation of RR 5-2021 by the Bureau of Internal Revenue. They contested in particular a clause that schools would have to be non-profit to avail the temporary tax cut under the CREATE law.

Salceda, who was principal author of the pandemic-related measure, said the “most obvious recourse” now is to define tax rates for the said schools that would allow it to be entitled to the reduction.

His proposed House Bill 9596 would include proprietary schools — or those owned and managed by private individuals or groups — to avail of the said easing of income tax.

“This relief is urgent as private schools continue to reel from the effects of COVID-19,” Salceda said, “and as government was unable to extend significant support to this sector given its own fiscal constraints.”

The Coordinating Council of Private Educational Associations had warned that the said hike, if pushed through, could result in more school closures and job loss for employees amid a pandemic.

Salceda, who is an economist, said too that the CREATE law and the intent of its authors “is to lower taxes on corporations, not to increase them.”

A number of lawmakers both in the House and the Senate have since urged BIR to scrap its policy. Legal expert Deputy Speaker Rufus Rodriguez (Cagayan de Oro), has said that it runs against the 1987 Constitution mandating the state to give priority to education, and make it accessible to all.

Sen. Sonny Angara, who chairs the upper chamber’s finance committe, has filed a similar measure. — Christian Deiparine with reports from Xave Gregorio