PRIVATE SCHOOLS said they are hoping a bill granting them eligibility for a lower tax rate is signed this month or in September, to remove the distraction of the dispute with the Bureau of Internal Revenue (BIR) and allow them to focus on their core teaching mission.

“We are hopeful that the bill can be signed into law before the new school year starts in earnest this August and September, so that our schools can fully focus on dealing with the Learning Crisis and the COVID (coronavirus disease) pandemic that our country is currently grappling with,” Coordinating Council of Private Educational Associations (COCOPEA) Managing Director Joseph Noel M. Estrada said in a statement Wednesday. 

Mr. Estrada also urged private educators to join COCOPEA in appealing to Congress to swiftly pass the bill “to extend a lifeline to our struggling schools during this pandemic, to ensure the continuity of learning for our students, to secure the jobs of our teachers and personnel, and to provide livelihoods for the many small businesses… who are dependent on our schools.

The House of Representatives’ Committee on Ways and Means passed the bill on second reading Monday.

House Bill 9913 amends Section 27 (B) of the National Internal Revenue Code of 1997 to explicitly allow all proprietary educational institutions and non-profit hospitals to avail of a 10% preferential tax rate for a limited period to allow them to recover from the economic crisis. 

Under the bill, the tax rate of private schools will further be reduced to 1% from July 1, 2020 to June 30, 2023, as authorized by Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law. 

The BIR’s view on eligibility for tax relief was that it only applied to non-profit institutions, leaving for-profit schools to pay the regular corporate tax rate, currently at 25%. 

The BIR has since withdrawn its interpretation of the tax treatment for private schools. — Bianca Angelica D. Añago