A new tax regulation issued by the Bureau of Internal Revenue (BIR) that would impose a 25 percent corporate income tax on private schools from the current 10 percent has met opposition from the Palawan provincial board.
The new regulation stipulated under Revenue Regulation (RR) No. 5-2021, said Tuesday by Board Member Ryan Maminta, could devastate the operations of private schools that are already burdened because of the COVID-19 pandemic, and worse, could force them to close down.
Maminta, who authored a resolution opposing the new BIR order, said it is also contrary to the offered one percent pandemic rescue package under the Corporate Recovery and Tax Incentives for Enterprises or CREATE Act.
He said the Act provides that both proprietary and non-profit private educational institutions could avail of the one percent rescue package rate from the current 10 percent.
Maminta said that to help the private education sector to survive the pandemic and continuously provide quality education to all, they should enjoy the preferential tax treatment of one to 10 percent and not suffer from the imposition of 25 percent corporate income tax.
“Palawan and Puerto Princesa City host various private schools that can be affected by this new tax regulation and imposition—it will harm them even more, including the parents, students and private education stakeholders amidst the pandemic,” Maminta said.
A separate resolution was also passed expressing support to the passage of Senate Bill No. 2279 authored by Senator Sony Angara, but with an aim to rectify the part on BIR RR no. 5-2021.
In his website, Angara said that businesses linked to the educational institution would also be affected.
“The bottom line is that private schools have been paying for more than half-a-century a preferential tax rate of 10% so how could a law that cuts taxes for all corporations instead increases by 150 % the taxes private schools pay?” Angara added.