SEN. Nancy Binay yesterday joined her colleagues in calling for the Bureau of Internal Revenue to withdraw its new regulation imposing a 150 percent increase in the income taxes of private schools.
In a statement, Binay said imposing additional taxes would run counter to the intent of the recently-passed Corporate recovery and Tax Incentives for Enterprises (CREATE) Act, which is to ease the effect of the pandemic on businesses by lowering corporate income taxes.
Under the regulation that was issued on April 8, 2021, income tax on so-called proprietary educational institutions that are run by stock corporations would be increased to 25 percent from the current 10 percent.
“We think someone must have misinterpreted the (CREATE) law. We passed the CREATE Law to help business survive the effects of the pandemic through tax incentives. The law plainly states (Sec. 2, Paragraph D) the need to create a more equitable tax incentive system that will allow for inclusive growth and generation of jobs. It is not in the intention of the law to add burdens to schools,” Binay said.
She said that the regulation is clearly against the spirit of the law, and asked the BIR to immediately rescind its issuance.
Binay said she supports Senate Bill No. 2272 filed by Sen. Juan Edgardo “Sonny” Angara that seeks to amend a section of the National Internal Revenue Code (NIRC) aiming to correct an erroneous interpretation on the tax imposed on proprietary educational institutions.
