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After tax hike halt, private schools press for passage of law to address woes

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After tax hike halt, private schools press for passage of law to address woes
This August 2020 photo shows a grade school teacher at a private school in Las Piñas conducting an online class orientation.
The STAR / Edd Gumban

MANILA, Philippines — A network of private schools has welcomed the suspension of a tax rate hike to their members, but stressed the need to pass a law to put an end to their woes. 

The Bureau of Internal Revenue last week halted provisions of RR 5-2021 that would bring private institutions' income tax rate to 25% from just 10%. 

In a statement, the Coordinating Council of Private Educational Associations noted the move is temporary pending the approval of bills in Congress to resolve the issue.

COCOPEA added the suspension could be lifted anytime by BIR or the Department of Finance, "given the history of revenue issuances on this matter."

"It is critical that the bills be passed as soon as possible, before the new school year starts in September," said lawyer and managing director Joseph Noel Estrada. 

He added the enactment of measures would allow schools to devote their time and resources to addressing a learning crisis in the country.

There are two bills filed each in the Senate and the House of Representatives seeking to amend the national revenue code, and qualify both non-profit and proprietary schools to avail the tax cut under the CREATE law. 

The said measure slashed schools' tax rate to just 1% in the next three years as a relief from the COVID-19 pandemic, which has resulted in school closures and loss of jobs in the education sector. 

COCOPEA earlier warned that parents could bear the brunt of the tax rate to private schools from higher tuition and other fees.

"We shall remain vigilant on future developments on this important tax policy to ensure our proprietary educational institutions are securely protected from illegal tax burdens," Estrada added. 

The group had appealed for President Rodrigo Duterte to certify the bills as urgent in his final year. But in his last State of the Nation Address, the president made no mention of this and barely gave plans for education. 

Apart from pushing for the passage of bills in Congress, COCOPEA has also sought a temporary restraining order from the Court of Tax Appeals on BIR's regulation. 

BUREAU OF INTERNAL REVENUE COORDINATING COUNCIL OF PRIVATE EDUCATIONAL ASSOCIATIONS DEPARTMENT OF FINANCE RODRIGO DUTERTE SENATE OF THE PHILIPPINES
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