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More senators object to BIR's tax rate hike on private schools

Christian Deiparine - Philstar.com
More senators object to BIR's tax rate hike on private schools
The Coordinating Council of Private Educational Associations last week warned that schools will only be burdened more with the Revenue Regulation 5-2021, at a time when a lot have shut down or ceased operations due to the pandemic. 
AFP, file

MANILA, Philippines — Sen. Nancy Binay on Sunday said it would not make sense to hike private schools' tax rate to 25% amid a health crisis, becoming the latest member of the upper chamber to hit the Bureau of Internal Revenue's new policy.

The Coordinating Council of Private Educational Associations last week warned that schools will only be burdened more with the Revenue Regulation 5-2021, at a time when a lot have shut down or ceased operations due to the pandemic. 

"Many already have it hard," Binay said in Filipino. "Taxing private schools with 25% does not make any sense at all. A little bit of compassion won't hurt."

COCOPEA has said that almost 900 K-12 educational institutions have closed since the COVID-19 hit the country in March 2020.

It added that investments in classroom capacity and students' scholarships could be the first affected by BIR's regulation.

Four other senators have since objected on the said policy: Senate President Pro Tempore Ralph Recto and senators Sonny Angara who filed a bill to correct it, Joel Villanueva, and Sherwin Gatchalian, who chairs the chamber's committee on education. 

Recto said BIR should rescind its "erroneous order as it is a flawed interpretation" of the CREATE law. 

This measure slashed propriety schools' income tax to 1% in the next three years as a relief amid the pandemic. Senators and COCOPEA held the view that the RR 5-2021 goes against the said law. 

"The 25% was not imposed on schools in the past," said Angara, chairperson of the Senate finance committee. "Schools are among the hardest hit institutions during this pandemic. We can be more sensitive in our policies."

Seeking remedies

COCOPEA said it plans to seek a temporary restraining order before the Court of Tax Appeals in a bid to stop the implementation of BIR's latest regulation. 

The group has said that they have tried all means before the BIR and the Department of Finance on their concern but to no avail. 

It asked for President Rodrigo Duterte to intervene too, through a petition on June 4 with signatures of some 600 private education stakeholder groups.

"Our sector has not yet recovered from the debilitating effects of the K-12 law and is in the midst of struggling with the steep drop in enrollment caused by the pandemic," the group's letter to Duterte read. "RR 5-2021 will be the straw that breaks the camel's back."

BUREAU OF INTERNAL REVENUE

COORDINATING COUNCIL OF PRIVATE EDUCATIONAL ASSOCIATIONS

JOEL VILLANUEVA

NANCY BINAY

PRIVATE SCHOOLS

RALPH RECTO

SENATE OF THE PHILIPPINES

SHERWIN GATCHALIAN

SONNY ANGARA

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