Senator to block tax reform provision that could lead to rise in school tuition

Senator Paolo Benigno A. Aquino IV said he will block the removal of the 10% preferential tax rate for private non-profit schools under the second package of the tax reform program.
In a statement, the senator feared the removal of such provisions will lead to increase in tuition and other fees. He said these institutions may be taxed up to 25%, more than double its current rate.
“Sa dulo, ang mga pamilyang nagpapa-aral din ang papasan nito kaya tataas ang matrikula (In the end, the burden will be passed on to parents as these schools raise tuition.),” he said.
Under the present system, non-profit proprietary educational institutions receive a preferential 10% income tax rate, together with non-profit hospitals, offshore banking units, and regional operating headquarters.
The Senate version of the bill removed the 10% preferential income tax rate provision in the National Internal Revenue Code (NIRC) for proprietary educational institutions and hospitals.
Meanwhile the House version of the bill retained the 10% income tax rate for proprietary educational institutions and hospitals. However, it provided a condition that the institutions’ performance complied with the criteria provided by the Commission on Higher Education (CHEd), Department of Education (DepEd), and the Department of Health (DoH).
The institutions which failed to meet the standards will have to pay 10% income tax but will eventually increase to 15% and later to 20% at a specified period, if its performance remained below standards. — Camille A. Aguinaldo