House panel OKs bill vs higher taxes on private schools, hospitals

Published June 14, 2021, 2:15 PM

by Hannah Torregoza 

The House Committee on Ways and Means has approved the measure that seeks to put a stop to a government policy imposing higher tax on private schools and hospitals.

Committee chairman and Albay Representative Joel Salceda presided over the panel meeting that approved the consolidation of House Bills No. 9573, 9577 and 956 seeking to amend the National Internal Revenue Code of 1997 and allow private schools to avail of the 10 percent discount preferential rate on taxable income. The bills will also extend to them the same relief granted under the Corporate Recovery and Tax Incentives for Enterprises Act or CREATE law.

Simultaneously, the panel also approved House Resolution No. 1877 urging the Bureau of Internal Revenue (BIR) to revoke the said regulation—Revenue Regulation No. 5-2021.

Members of the Coordinating Council of Private Educational Associations (COCOPEA), and other educational institutions such as the Davao Colleges and Universities Network (DACUN), Association of Private, State Colleges and Universities in Region XI, Bicol Association of Private Colleges and Universities, CESAFI Association of Cebu Private Schools had pushed for the passage of the bill.

The bill, they said, would finally put to rest the conflicting interpretations on the applicable tax rates for proprietary educational institutions and in a manner that allows them to further avail of the lifeline extended by the CREATE law in the form of a reduced rate of 1 percent from July 1, 2020 to June 30, 2023.

“We are glad that many of our legislators…have risen to set in motion the process of enacting a law that would leave no doubt and no room for conflicting interpretations as to the preferential tax rate for proprietary educational institutions,” Joseph Estrada, managing director of COCOPEA, said.

The group said the biggest blow to the continuity of education and sustainability of educational institutions was the issuance of the RR 5-2021, considering that the COVID-19 pandemic has “put our backs o the wall even more.”

Estrada pointed out many of the private schools were forced to close and student transfers and dropouts in private basic education drastically reduced enrollment in higher education.

“We need government intervention to help us address the ongoing learning crisis and to nurture an empowering environment that will result in an accessible educational system with competitive global standards,” Estrada said.

Salceda thanked the Department of Finance (DOF) and the BIR for withdrawing any further proposals from their end that would keep or delay Congress from realizing the goal of the measures.

The House lawmaker said the panel will formally approve the measure once Congress’ session opens after President Duterte’s State of the Nation Address (SONA).

“There’s nothing that we can’t do if we work together with reason and especially if we do it quietly, because I think abrasive approaches I think tend to have a contrary effect,” Salceda said.

“I would like to especially thank the DOF for the forbearance on both two issues, the refund and of course the second paragraph of the constitutional provision with respect to the conditions on the entitlement for preferential treatment,” the solon added.

“I think it’s a big win for another provision of the Constitution that the private sector is a partner of the government in the highest priority of the state which is education,” the lawmaker stressed.