To fast-track its enactment, the House of Representatives has adopted the Senate version of the proposed bill defining the tax treatment for proprietary schools.
Upon recommendation by (Albay 2nd district) Rep. Jose Ma. Clemente S. Salceda, the Lower Chamber adopted late Wednesday Senate Bill 2407 as an amendment to House Bill 9913, which seeks to clarify the income taxation on educational institutions.
According to Salceda, principal author and sponsor of the measure, they would be able to send the bill before the weekend to Malacañan for the President’s signature.
Earlier, Senator Pia S. Cayetano said the measure will clarify that all private schools—both ‘non-profit’ and ‘for profit’—are entitled to the 1 percent preferential tax rate under Republic Act (RA) 11534, otherwise known as the Corporate Recovery and Tax Incentives for Enterprises (Create) Act, which was enacted last March.
She noted that many private schools are in a critical state, citing data from the Coordinating Council of Private Educational Associations of the Philippines (Cocopea) showing that enrollment among its member-schools has declined to 60 percent this school year, compared to 2020.
Meanwhile, Salceda, chairman of the House Committee on Ways and Means, said he will follow up with the Bureau of Internal Revenue (BIR) to ensure that the revenue regulations on the matter are released as soon as possible.
The measure, entitled an act clarifying the income taxation of propriety education insitutions amending for the purpose Section 27 B of the National Internal Revenue Code of 1997, as amended, seeks to apply the preferential tax rate of 10 percent on taxable income prospectively and allow proprietary schools to avail of the 1 percent tax rate under RA 11534.
According to Salceda, the legislative intent of their own version under HB 9913 can be reflected in a subsequent revenue regulation.
He added the measure will help private schools hire more teachers.
“Applying the Create [law] until 2023 would allow these schools to save an equivalent of 3.43-percent of compensation expenses, which could help them rehire at least 12,996 teachers at the start of the next school year,” he said.
“By this means, we are indirectly helping private schools teachers, whom unfortunately we were not able to extend direct financial assistance to during the Covid pandemic,” he added.
Earlier, the Cocopea said the legislative policy intervention, once enacted into law, will provide the needed stability to education not only in this time of pandemic but also for generations to come, as it aligns with all existing and future initiatives to revive the battered economy.