Cocopea says some private schools still charged 30% income tax

Published October 23, 2021, 1:29 PM

by Gabriela Baron

The Coordinating Council of Private Educational Associations (Cocopea) said that some regional offices of the Bureau of Internal Revenue (BIR) are still imposing a 30-percent income tax rate on proprietary education institutions despite the suspension of the order by the Department of Finance (DOF).


“We received reports from our members that despite the on-going legislative process and DOF’s suspension of BIR Revenue Regulation 5-2021, some BIR regions continue to impose a 30% income tax rate citing BIR RMC-67 series of 2012,” said Cocopea Chairman Anthony Jose M. Tamayo in a statement released on Friday, Oct. 22.

In July, BIR suspended the implementation of Revenue Regulation (RR) No. 5-2021 that imposes a 25-percent corporate income tax on private schools.

“These BIR regions continue to argue that RR 14-2021 which suspended RR 5-2021 applies prospectively and does not apply to assessments involving prior fiscal years,” he added.

Tamayo, who also heads the Philippine Association of Colleges and Universities (PACU), called for the urgent enactment of the clarificatory bill “which would serve as the lifeline of these educational institutions from the incorrect implementation of Sec. 27B of the Tax Code that puts them at the brink of closure.”

He reiterated that the swift enactment of the bill would “secure with finality” the grand of preferential tax rate of 10 percent for proprietary schools, including the temporary rate of one percent during the pandemic, under the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act).

Once signed into law, the bill would make private schools qualified for a concessionary tax rate of one percent under CREATE Act, instead of the 150-percent increase imposed by a recent regulation by BIR.

“As the Philippine economy gradually and safely reopens, which includes the safe reopening of our schools to face to face learning starting November 15, 2021, the enactment of this bill would allow the educational institutions to focus on their efforts to ensure safety of students, teachers, and school personnel in-campus,” Tamayo said.

“The millions of stakeholders of the private education sector and the linked ecosystem that depend on the continuity of our schools eagerly await the enactment of this landmark legislation. More importantly, this clarificatory bill will finally put to rest all ambiguities in the grant of preferential tax rate of 10 percent to proprietary educational institutions since the enactment of the National Internal Revenue Code in 1997, and even prior.”

Cocopea represents over 2,500 private educational institutions with over 300,000 school personnel.

Other groups are also pushing for the immediate enactment of the bill are Davao Colleges and Universities Network (DACUN), Association of Private, State Colleges, and Universities in Region XI (APSCUR XI), Bicol Association of Private and Colleges and Universities (BAPCU), and CESAFI Association of Cebu Private Schools.