taxes

BIR suspends new rule imposing 25% tax on private schools

Bonz Magsambol
BIR suspends new rule imposing 25% tax on private schools

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Senators welcome the suspension and push for the immediate passage of a bill that would correct the 'erroneous' regulation

The Bureau of Internal Revenue (BIR) has suspended the implementation of Revenue Regulation (RR) No. 5-2021 that imposes what education stakeholders called a “devastating” 25% corporate income tax on private schools.

In a BIR order dated July 26 obtained by Rappler, the agency said it made the decision to ease “the burden of taxation among proprietary educational institutions and taking into account the pending bills in the Congress.”

The Coordinating Council of Private Educational Associations (Cocopea) had said that RR No. 5-2021 would hit parents the hardest, as the BIR rule would compel schools to increase tuition. It was also feared that more schools would be forced to shut down.

Cocopea is the country’s biggest organization of private schools composed of about 2,500 schools and education stakeholders.

Law still needed

Senators welcomed the suspension of the new tax rule, as they called for the immediate passage of a bill that would correct the “erroneous” regulation.

“This is one problem partially solved. Let us move forward by adopting measures that will address the crisis in the entire educational system which the pandemic has worsened,” said Senate President Pro Tempore Ralph Recto.

“Reading the new revenue regulation, it is clear that the executive merely granted a reprieve. Permanent respite will come from Congress,” said Senator Sonny Angara, chairman of the Senate committee on finance.

Angara filed Senate Bill 2272 filed to correct the new tax regulation. The bill was co-authored by 13 other senators: Recto, Senate Majority Leader Juan Miguel Zubiri, Joel Villanueva, Nancy Binay, Sherwin Gatchalian, Grace Poe, Richard Gordon, Francis Pangilinan, Risa Hontiveros, Manny Pacquiao, Bong Revilla, Cynthia Villar, and Leila de Lima. – Rappler.com

Bonz Magsambol

Bonz Magsambol is a multimedia reporter for Rappler, covering health, education, and social welfare. He first joined Rappler as a social media producer in 2016.