CEBU CITY, Philippines – Cebu educational institutions, along with parent and teacher associations, are calling for Revenue Regulations No. 5–2021, which provides for a tax rate of 25 percent on property schools instead of the preferential tax rate of 10 percent.
Proprietary colleges are for-profit colleges and universities. They are run by their owners or investors and not by any nonprofit institution, religious organization, or government.
Deputy House Speaker Rufus B. Rodriguez tabled an amending bill this week to “correct” BIR RR 5-2021, which he said has illegally raised taxes on property institutions as the National Internal Revenue Code (NIRC) expressly stated in Section 27 (B) that “hospitals that are nonprofit and company-owned educational institutions” are only taxed at 10 percent.
“The BIR interpreted this provision as meaning that the rate of 10% (from July 1, 2020 to 30 will benefit.”
“If this is not corrected, many more private schools could be forced to close their tuition fees or increase their tuition fees, which will be to the detriment of our students and their families. These students could also be forced to move to public schools, which would then lead to public schools being overcrowded and the government needing more resources, “Rodriguez said.
It should be noted that the taxes on these educational institutions have been reduced to 1 percent from July 1, 2020 through June 30, 2023 in accordance with the Corporate Restructuring and Tax Incentives for Companies Act (CREATE Act).
Rodriguez tabled the bill in Congress just before the House of Representatives adjourned its second regular session today, June 5, 2021.
In his dialogue with the school administration of Cebu, Rodriguez pointed out that the amendment to BIRR IRR No. 5-211 was necessary because the regulation was “unconstitutional, unlawful and without legal basis”.
The bill has not yet been read to Congress, which must be referred to a committee, but Rodriguez hopes the bill will be addressed soon as the change is urgent.
Augustus Go, the president of the University of Cebu (UC), said that if the 25 percent tax were levied, they would have no choice but to let the paying students bear the burden of what would further threaten the education system the country.
In a recent survey by the Coordinating Council of Private Educational Associations (Cocopea), they found that over 50 percent of those polled in schools saw a decline in school enrollment.
“The unintentional episode of RR 5–2021 is impose very heavy load on the Private education sector at a time when schools are already strulikeing to to survive how a Result of first the K–to–12th plot, and now the pandemic.”
“The immediate effects will show in a strong reduction of Investing in classroom capacity and scholarShips. The longer–term A hit from RR 5-2021 would Be this faculty and staff are more at risk of to lose you Jobs, and even the communiTies and small Companies built near schools (e.G., Dorms, Caretaker and security Services, uniform Sewerage, Carinderia, sari-sarI Shops, and school bus services) howll Be significant affected,“Said attorney Joseph Noel Estrada, managing director of Cocopea.
Citing data from the Ministry of Education (DepED) and the Commission on Higher Education (CHED), Estrada pointed this out out that it is over 6. gives.1 million enrolled students in the 4,125 private educational institutions, over 300 Thousands of lecturers and employees in the basic training units of private educational institutions and approx. 100 a thousand in higher Education.
Engineer Bernard Nicolas Villamor, president of the Cebu Institute of Technology-University (CITU) and vice president of the Philippine Association of Colleges and Universities, also supports the bill, adding that educational institutions need help to implement the change.
He thanked the deputy spokesman Rodriguez for initiating the bill and expressed the hope that the BIR IRR. No. 5-2021 will eventually be changed so that institutions like CIT-U and UC will not continue to suffer from this economically devastating pandemic. / rcg
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