House OKs lower tax rates for private schools

MODERN CLASSROOM Students scan the classroom computers while waiting for their professor to arrive. —FILE PHOTO

MANILA, Philippines — The House of Representatives on Tuesday approved on third and final reading a bill that would lower tax rates for proprietary schools and allow them to avail of the 10-percent preferential rate on taxable income.

Voting 203-0-0, the lower chamber passed House Bill No. 9913 that would allow private schools to enjoy a 1 percent preferential tax rate until June 30, 2023.

Rep. Joey Salceda, the House tax chief and principal author of the bill, said the measure was meant to intervene in the implementation of the Bureau of Internal Revenue regulation that would increase the tax rate of private educational institutions to 25 percent from 10 percent.

“Although the rule was suspended, their responsibility under the law has not yet been expunged. So, we still have to address that complication. Besides, they are unable to avail of the 1 percent rate,” Salceda said.

He urged the Senate to immediately pass the bill to help private schools hire more teachers and keep existing staff through tax relief.

Help schools keep teachers

“It will help private schools keep their teachers. They already had to fire teachers due to the pandemic,” he said.

“The Senate will not disagree. And I hope they could just adopt the House version, as we do when their version is also acceptable to us. We did so with the Pogo (Philippine offshore gaming operator) tax regime. They could return the favor for the sake of private schools, an extremely crucial sector,” he added.

Gabriela Rep. Arlene Brosas, who also authored the bill, said clarifying the tax rate on proprietary schools was necessary to avoid further retrenchment and cost-cutting among pandemic-hit private schools.

“This is the much-needed correction to the syntactical conundrum under the Corporate Recovery and Tax Incentives for Enterprises Law, which implies that only nonprofit schools can benefit from the preferential tax rate of 1 percent until 2023,” Brosas said.