‘BIR regulation raising private school taxes illegal’

MANILA, Philippines — The government’s new revenue regulation which increases the tax on private schools under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law is illegal, a House leader said yesterday.

Deputy Speaker Rufus Rodriguez, a legal expert and former law school dean, said Bureau of Internal Revenue (BIR) Regulation No. 5-2021, which would impose 25 percent in corporate tax to proprietary schools, violates provisions of the 1987 Constitution.

“The action of the BIR is contrary to the 1987 Constitution which mandates that: ‘The State shall give priority to education’ (Article II, Section 17) and ‘The State shall protect and promote the right of all citizens to quality education at all levels and shall take appropriate steps to make such education accessible to all’ (Article XIV, Section 1),” Rodrigiez said.

He called on the BIR and the Department of Finance to immediately rescind RR 5-2021.

He warned that more private educational institutions might be forced to fold up due to the BIR regulation, citing data from the Department of Education showing that for school year 2020-2021, enrollment in private K-12 schools dropped by over 900,000 compared to the previous school year.

The Coordinating Council of Private Educational Associations has also reported that half of their members have experienced a decline in enrollment, he said.

He said if the BIR-imposed rate is not corrected, “more schools will be forced to close down or raise their tuition and other fees to the detriment of our students and their families.”

With increased fees, students may opt to transfer to the already crowded public school system, or drop out, he said.