MANILA – The House of Representatives on Monday approved on final reading a proposed measure that aims to define the tax rates for proprietary schools.
Voting 203-0-0, the chamber approved House Bill 9913 or the Act Clarifying the Income Taxation of Proprietary Educational Institutions.
This measure aims to extend the tax relief granted under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law.
It seeks to clarify that the preferential tax rate of 10 percent imposed on proprietary educational institutions will be reduced to one percent from July 1, 2020, to June 30, 2023, after which the tax rate shall be set to 10 percent under the CREATE law.
Albay Rep. Joey Salceda, principal author of the bill, said this would constitute a 96 percent tax discount for private schools from 2020 to 2023 and a 60 percent tax discount thereafter.
“That is the largest ever tax cut to any sector ever in the country’s history, and I am proud that we will do it for the sector the Constitution values the most – the education sector,” according to Salceda.
The bill will also “intervene” in the implementation of the Bureau of Internal Revenue’s (BIR) Revenue Regulation No. 5-2021, increasing the tax rate of private educational institutions to 25 percent from 10 percent.
Sen. Ralph Recto had earlier asked the BIR to rescind the regulation, saying it stemmed from a “flawed” interpretation of the CREATE Act. Sen. Sonny Angara also filed a bill in the upper chamber citing the regulation’s “erroneous” interpretation.
Last month, the BIR suspended the implementation of the regulation.
Salceda said HB 9913 would help private schools keep their teachers.(GMA News)
