Gatchalian hails law providing tax relief to private schools

Senator Win Gatchalian hailed the signing of a law that would grant tax relief to private schools, a move that the lawmaker said would help them stay afloat amid the devastating effects of the COVID-19 pandemic.

Republic Act No. 11635, which President Rodrigo Duterte signed into law on December 10, 2021, further amends Section 27 (B) of the National Internal Revenue Code of 1997, as amended, to reduce the preferential tax rate of 10% to 1% imposed on proprietary educational institutions.

While the law provides that proprietary educational institutions shall pay a 10% tax on their taxable income, the 1% tax rate shall be imposed between July 1, 2020 until June 30, 2023.

The law defines proprietary educational institutions as any private school maintained and administered by private individuals or groups and with 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).

According to Gatchalian, the signing of the law clarifies and reinforces the intention of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) to provide relief to private schools. It can be recalled, however, that the Bureau of Internal Revenue (BIR) came up with Revenue Regulation No. 5 which said that an educational institution can avail of the lower tax rate if it is proprietary and non-profit. For schools that do not meet the category, a 25% rate would be imposed, an equivalent of a 150% increase.

The heavier burden could result in more schools suspending operations or closing down, more job losses, and more learners losing access to quality education. Data from the Department of Education (DepEd) showed that because of the pandemic, enrollment in private schools declined by 929,000; about 643,000 students transferred to the public education system; while 452 private schools suspended their operations or closed down.

"Dahil sa matinding pinsalang dulot ng pandemya sa ating mga pribadong paaralan, higit nilang kinakailangan ang lahat ng uri ng suporta mula sa ating pamahalaan. Kaya naman napapanahon ang batas na magbabawas sa kanilang buwis hanggang sa taong 2023 upang tulungan silang makabangon at maipagpatuloy ang paghahatid ng dekalidad na edukasyon," said Gatchalian, chairman of the Senate Committee on Basic Education, Arts and Culture.

Gatchalian, one of the co-authors and co-sponsors of the law, also thanked Senator Sonny Angara, the law's principal author, and Senator Pia Cayetano who sponsored the law.

Gatchalian: Buwis para sa mga pribadong paaralan babawasan sa gitna ng pandemya

Ayon kay Senador Win Gatchalian malaki ang maitutulong ng paglagda sa batas na magpapataw ng mas mababang buwis sa mga pribadong paaralan sa gitna ng matinding pinsalang dulot ng pandemya ng COVID-19.

Nilagdaan noong nakaraang Disyembre 10, 2021 ni Pangulong Rodrigo Duterte ang Republic Act No 11635. Sa ilalim ng bagong batas, muling inamyendahan ang Section 27 (B) ng National Internal Revenue Code of 1997 upang pababain ang preferential tax rate sa mga pribadong paaralan o proprietary educational institutions. Ang dating sampung porsyentong buwis ay magiging isang porsyento na lamang sa loob ng tatlong taon.

Bagama't nakasaad sa batas na nananatiling sampung porsyento ang buwis sa taxable income ng mga pribadong paaralan, ang isang porsyentong buwis ay nakatakdang ipataw mula Hulyo 1, 2020 hanggang Hunyo 30, 2023.

Sa ilalim ng naturang batas, ang mga proprietary educational institutions ay mga pribadong paaralan na pinatatakbo ng mga pribadong indibidwal o grupo. Kinakailangang meron ding permit to operate ang naturang mga paaralan mula sa Department of Education (DepEd), Commission on Higher Education (CHED), at Technical Education and Skills Development Authority (TESDA).

Ayon kay Gatchalian, nililinaw at binibigyang diin ng bagong batas ang intensyon ng Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) na magpataw ng mas mababang buwis sa mga pribadong paaralan. Matatandaang inilabas ng Bureau of Internal Revenue (BIR) ang Revenue Regulation No. 5 kung saan nakasaad na ang mga paaralang proprietary at non-profit lamang ang maaaring mapatawan ng mas mababang buwis. Para sa mga paaralang hindi pasok sa ganitong depinisyon, kinakailangan nilang magbayad ng dalawampu't limang porsyentong buwis o katumbas ng isang daan at limampung porsyentong pagtaas.

Ang mas mabigat na buwis kasi ay kinatatakutang magresulta sa pagsasara ng mas maraming paaralan at pagkawala ng mas maraming trabaho. Maaari ring mapagkaitan ang mas maraming mag-aaral ng dekalidad na edukasyon dahil dito. Lumalabas sa datos ng DepEd na dahil sa pandemya, bumaba ng halos isang milyon (929,000) ang enrollment sa mga pribadong paaralan, mahigit anim na raang libong (634,000) mag-aaral ang lumipat sa mga pampublikong paaralan, at mahigit apat na raan (452) ang nagsuspinde ng operasyon o nagsara.

"Dahil sa matinding pinsalang dulot ng pandemya sa ating mga pribadong paaralan, higit nilang kinakailangan ang lahat ng uri ng suporta mula sa ating pamahalaan. Kaya naman napapanahon ang batas na magbabawas sa kanilang buwis hanggang sa taong 2023 upang tulungan silang makabangon at maipagpatuloy ang paghahatid ng dekalidad na edukasyon," ani Gatchalian, chairman ng Senate Committee on Basic Education, Arts and Culture na isa rin sa mga co-author at co-sponsor ng batas.

Pinasalamatan din ni Gatchalian si Senador Sonny Angara, ang pangunahing may akda ng batas at si Senador Pia Cayetano na sponsor din ng naturang batas.