Senator Risa Hontiveros said the Bureau of Internal Revenue (BIR) should revoke the order imposing a 25 percent tax increase on private schools as this may only displace more students should these institutions are forced to close due to increased economic pressure due to the coronavirus (COVID-19) pandemic.
Hontiveros said the BIR’s Revenue Regulation 5-2021 is clearly “anti-student” and could further derail attempts of the education sector to overcome the challenges of online and distance learning activities during this global health crisis.
“Our private educational institutions are in dire need of a lifeline. Schools are one of the institutions that we ought to prioritize in saving during a crisis,” Hontiveros said.
“Our public schools are all already overwhelmed and the teachers are also having a hard time already. So I hope we could all provide support to our private schools,” she further said.
Citing the argument raised by the Coordinating Council of Private Educational Associations of the Philippines (COCOPEA), Hontiveros agrees that the BIR’s clarification does not change anything except for their sample computation in the RR 5-2021 which was mathematically incorrect.
The clarification is contained in Revenue Memorandum Circular 76-2021 that merely clarified the "Illustrative Examples in the Computation of Corporate Income Tax" under RR 5-2021.
The BIR’s regulation obliges private schools to pay a 25 percent corporate income tax, disqualifying them from the one percent rate offered by the CREATE Act’s pandemic rescue package.
Hontiveros said she supports the position of the COCOPEA that pushes for for-profit private schools to be entitled to CREATE’s package that provides for one percent tax from July 1, 2020 until June 30, 2023.
COCOPEA has claimed that their 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 also said enrollment in private schools declined by 50 percent, which is equivalent to two million students. They also said around 250,000 private school students have transferred to public schools since the pandemic.
Hontiveros noted that there are also smaller and mission-driven private schools that serve the needs of remote areas, and these schools need the lifeline the most.
“We cannot afford to lose more schools. We cannot further handicap our education system. Let’s not worsen the problem our schools, our teachers and students are facing,” the lawmaker appealed.
“Let us be sensitive to the needs of these sector during this time when everyone is having a difficult time. More importantly, we need to understand that the future of our students are also at stake here,” Hontiveros said.