Private school officials have objected to the Bureau of Internal Revenue’s new regulation hiking the tax rate in their institutions to 25%, warning it could lead to closures and loss of jobs amid the pandemic.
The Coordinating Council of Private Educational Associations urged the BIR to amend its Revenue Regulation, which it called as “ill-conceived and insensitive to the realities” of members.
Lawyer Joseph Noel Estrada, COCOPEA’s managing director, said, “The unintended consequence of RR 5-2021 is to impose a very heavy burden on the private education sector at a time when schools are already struggling to survive as a result of first, the K-12 Act, and now the pandemic.”
BIR’s new move would set a 15% increase in private schools’ tax rate from the original 10%, according to the group.
Estrada added the policy goes against the CREATE law, where propriety schools’ income tax rate was temporarily reduced to 1% in the next three years.