Gatchalian urges BIR: suspend imposition of tax hike on private schools

Senator Win Gatchalian is urging the Bureau of Internal Revenue (BIR) to suspend the imposition of a 25 percent corporate income tax on private schools, warning that the added burden on struggling institutions amid the COVID-19 pandemic could lead to more school closures, job losses, and a more restricted access to education.

For the Chairman of the Senate Committee on Basic Education, Arts and Culture, BIR's Revenue Regulation (RR) 5-2021 runs counter to the intention of the Corporate Recovery and Tax Incentives for Enterprises Act or the CREATE Act (Republic Act No. 11534) which seeks to impose a one percent tax rate on proprietary educational institutions for a three-year period. The law also provides that these institutions have to pay ten percent tax on their taxable income.

Under the CREATE Law, 'proprietary' means a private hospital or private school maintained and administered by private individuals or groups. These institutions should have an issued permit to operate from the Department of Education (DepEd), the Commission on Higher Education (CHED), and the Technical Education and Skills Development Authority (TESDA).

Based on RR 5-2021, however, proprietary educational institutions have to be non-profit to avail of the reduced tax rate. If these rules are imposed, private schools' income tax rate would increase by 150 percent.

In an earlier statement, Gatchalian called the tax rule ill-timed considering how private schools are trying to stay afloat. He cited the March 2021 Labor Force Survey, which showed that the education sub-industry had the largest decrease in the number of employed persons from February to March 2021 at 248,000.

Last February, DepEd reported that 929 private schools did not operate for the school year (SY) 2020-2021. Citing a report from DepEd, the Coordinating Council of Private Educational Associations (COCOPEA) said in a statement that enrollment in private K-12 schools dropped by over 900,000 compared to the previous school year.

"Sa panahong karamihan sa ating mga private schools ay nahihirapang magpatuloy ng operasyon sa gitna ng pandemya, hindi napapanahon at hindi tamang patawan natin sila ng karagdagang buwis bilang dagdag pasanin," said Gatchalian.

Gatchalian is also mulling to file a resolution that would urge the BIR to suspend the imposition of the tax hike on private schools.

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Suspensyon sa pagtaas ng buwis sa mga pribadong paaralan isinusulong ni Gatchalian

Hinimok ni Senador Win Gatchalian ang Bureau of Internal Revenue (BIR) na suspindihin ang pagpataw ng dalawampu't limang (25) porsyentong corporate income tax sa mga pribadong paaralan. Babala ng mambabatas, ang dagdag na pasaning ito ay magdudulot ng pagsasara ng marami pang mga pribadong paaralan at kawalan ng trabaho sa hanay ng mga guro at school personnel -mga bagay na magbibigay dahilan upang mapagkaitan ng edukasyon ang maraming mga mag-aaral sa gitna ng krisis ng COVID-19.

Ayon sa Chairman ng Senate Committee on Basic Education, Arts and Culture, ang Revenue Regulation (RR) 5-2021 ay salungat sa intensyon ng Corporate Recovery and Tax Incentives for Enterprises Act o ang CREATE Act (Republic Act No. 11534) na layong ibaba sa isang porsyentong buwis mula sa kasalukuyang sampung porsiyento ang ipapataw sa mga "proprietary educational institutions" sa loob ng tatlong taon.

Ayon kasi sa CREATE Law, ang "proprietary" ay nangangahulugang pribadong ospital at paaralan na pinangangasiwaan ng mga pribadong indibididwal o kaya ay mga grupo. Dapat ding may permit ang mga ito mula sa Department of Education (DepEd), Commission on Higher Education (CHED), at Technical Education and Skills Development Authority (TESDA).

Pero sa ilalim ng RR 5-2021, ang mga paaralang ito ay dapat maituring na non-profit upang hindi mapatawan ng mas mataas na buwis. Kung matuloy ang pagpapatupad ng mas mataas na buwis, ang income tax rate ng mga pribadong paaralan ay aakyat ng isang daan at limampung (150) porsyento.

Una nang ipinahayag ni Gatchalian na ang regulasyong ito ay hindi napapanahon lalo na't hirap na ang mga pribadong paaralan sa panahon ng pandemya. Ayon sa March 2021 Labor Force Survey, sa sektor ng edukasyon naitala ang pinakamataas na kawalan ng trabaho mula Pebrero hanggang Marso 2021 na pumalo sa halos dalawang daan at limampung libo (248,000).

Noong Pebrero naman, iniulat ng DepEd na mahigit siyam-na-raang (929) mga pribadong paaralan ang nagsuspinde ng kanilang operasyon para sa School Year 2020-2021. Ayon sa isang ulat ng DepEd na ibinahagi ng Coordinating Council of Private Educational Institutions (COCOPEA) sa isang pahayag, siyam-na-rang libong (900,000) mga mag-aaral ang nawala sa mga pribadong K-12 schools kung ihahambing sa nagdaang taon.

"Sa panahong karamihan sa ating mga private schools ay nahihirapang magpatuloy ng operasyon sa gitna ng pandemya, hindi napapanahon at hindi tamang patawan natin sila ng karagdagang buwis bilang dagdag pasanin," ani Gatchalian.

Balak ni Gatchalian na maghain ng isang resolusyon upang himukin ang BIR na suspindihin ang pagpataw ng mas mataas na buwis sa mga pribadong paaralan.

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