Press Release
July 30, 2021

STATEMENT OF SEN. WIN GATCHALIAN ON THE SUSPENSION OF TAX HIKE ON PRIVATE SCHOOLS

I would like to thank and commend the Bureau of Internal Revenue (BIR) and the Department of Finance (DOF) for suspending provisions of Revenue Regulation (RR) No. 5-2021, which would have hiked the income tax of proprietary educational institutions to 25 percent. This move is consistent with the intention of Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, which imposes a 10 percent tax on the taxable income of private schools, while keeping the tax rate at one percent from July 1, 2020 to June 30, 2023.

While this gives our private schools a sigh of relief, especially amidst the continuing challenges of the COVID-19 pandemic, the crucial next step now is for Congress to amend Section 27 (B) of the National Internal Revenue Code, as amended, to safeguard the preferential income tax of all our private schools. We hope to achieve this with the passage of Senate Bill No. 2272.

Through this legislation, we will be easing the burden on private schools—our partners in delivering quality education—as they continue to grapple with the effects of plummeting enrollment, job losses, and closures during this pandemic.

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