Associations of private schools lauded members of the Senate for “crossing party lines” to pass a bill on second reading that will “prevent the collapse of proprietary educational institutions” in the face of a massive increase in tax rates during the pandemic.
In a joint statement issued Thursday, Sept. 23, the associations expressed profound gratitude to the Senate for “swiftly and favorably acting” on Senate Bill 2407 entitled “An Act Clarifying the Income Taxation of Proprietary Educational Institutions, Amending for the Purpose Section 27 (B) of the National Internal Revenue Code of 1997, As Amended.”
The proposed amendment will make private schools qualified for a concessionary tax rate of 1 percent under the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act), instead of the 150-percent increase imposed by a recent regulation by the Bureau of Internal Revenue.
The signatories in the statement include the Coordinating Council of Private Educational Associations (COCOPEA), which represents over 2,500 private educational institutions with over 300,000 school personnel; Davao Colleges and Universities Network (DACUN); Association of Private, State Colleges, and Universities in Region XI (APSCUR XI); Bicol Association of Private Colleges and Universities (BAPCU); and CESAFI Association of Cebu Private Schools.
Senate Bill 2407 seeks to amend Section 27(B) of the National Internal Revenue Code (NIRC) of 1997 to rectify with finality the flawed interpretation of a provision under the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act) by the BIR’s Revenue Regulation 5-2021 which imposes a 150-percent increase in taxes on private schools.
Hearing the sponsorship speeches for SB 2407, Dr. Anthony Tamayo, chairman of COCOPEA and president of Philippine Association of Colleges and Universities (PACU), said that “we are reassured that our legislature will not turn its back on private education in ensuring it gets the rightful share in the recovery and assistance measures that it grants to various sectors through the enactment of the CREATE Act.”
“Education, as a public good, certainly deserves such significance and priority being given by our honorable senators,” Tamayo said.
“This was highlighted by Senate’s immediate termination of the period of interpellation to substantially save time and expedite Senate approval of the measure,” it added.
With the approval by the Senate, Tamayo said that SB 2407 moved a step closer to its enactment into a law which would “greatly help” the private education sector together with its stakeholders.
"We need this more than ever,” Tamayo said especially with the enrolment numbers in private schools continues to go down because of the pandemic.
This economic and policy intervention from the Senate, Tamayo said, “empowers and uplifts our institutions in taking on the challenges in education particularly the current learning crisis of our students.”
He added that this will also help in the preparations for reopening of schools to in-person classes and the need to “continuously strengthen our country’s human capital development in response to the fast-evolving digital economy.”
With just a few days left before the session breaks in October for the filing of candidacies for the 2022 national elections, the associations expressed hope that SB 2407 be passed into law as soon as possible.
Tamayo noted that the millions of stakeholders of the private education sector and the linked ecosystem that depend on the continuity of their schools, “would be deeply grateful” to the Senate for this move.
He added that the Senate’s “swift and conclusive correction” of BIR Revenue Regulation 5 – 2021’s erroneous interpretation of the CREATE Act --- which the Senate and the House “clearly intended to provide a relief, not a burden, to the private education sector as partner of government, amidst the devastating pandemic.”