Angara thanks DOF, BIR for suspending controversial tax on private schools

Senator Sonny Angara on Thursday thanked Finance Secretary Carlos Dominguez for suspending the implementation of the provisions of Revenue Regulations 5-2021 pertaining to the tax on private schools.

“Maraming salamat Secretary Dominguez for heeding the clamor private educators who share with government the burden of teaching our youth,” the chair of the Senate finance committee said.

“This is what I call a taxation timeout. Now, the ball is on the court of Congress to permanently fix the confusion caused by the language of that law,” Angara said.

Last Monday, the BIR issued Revenue Regulation 14-2021, suspending the implementation of Sections 2(C) on the definition of Proprietary Educational Institutions insofar as it includes the phrase “which are non-profit”; 2(E) on the definition of non-profit insofar as it applies to “Proprietary Educational Institutions”; and 3(B) which provides illustration on the tax treatment of Proprietary Educational Institutions that are non-profit.

In the RR, it was stated that the suspension was meant to “ease the burden of taxation among proprietary educational institutions, especially during this time of Covid-19 pandemic.”

“Reading the new revenue regulation, it is clear that the executive merely granted a reprieve. Permanent respite will come from Congress,” Angara said.

RR 14-2021 also took note of the bills being taken up in Congress to amend Section 27(B) of the National Internal Revenue Code of 1997 in order to clarify the tax imposed on schools.

One of these bills is Senate Bill 2272 filed by Angara to clarify that that the preferential tax rate shall apply to all proprietary educational institutions, including those that are stock and for profit, and non-profit hospitals.

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Source: Latest Politics News Today (Politics.com.ph)