Clarifying an otherwise ambiguous provision in the country’s tax code on private educational institutions will serve as a lifeline for thousands of schools forced to shutter or reduce operations at the height of the COVID-19 pandemic, according to Senator Joel Villanueva.
In sponsoring Senate Bill No. 2407 on Tuesday afternoon, Villanueva said the measure sought to ease the tax burden on thousands of educational institutions reeling from the impact of the COVID-19 pandemic which has already led to the closure of more than 800 schools.
“Hindi po natin maikakaila na isa sa mga lubhang tinamaan ng pandemya ang sektor ng edukasyon. Sinusuportahan po natin ang agarang pagpasa ng Senate Bill No. 2407 dahil maraming trabaho at kabuhayan po ang maliligtas nito sa sektor ng edukasyon sa bansa,” Villanueva said in his co-sponsorship speech.
The bill seeks to amend Section 27 of the revenue code to make it clear that educational institutions were qualified for a tax relief equivalent to 1 percent of preferential or corporate income tax.
He said it was a good sign that enrollment for the School Year 2021 to 2022 has reached 27.6 million students and 1.9 million of them are enrolled in private institutions.
“Ngunit hindi pa po bumabalik sa pre-pandemic level ang enrollees sa private schools,” said Villanueva, chair of the Senate higher and technical and vocational education committee. The reason, he added, was that the pre-pandemic private school enrollment of 4.3 million students was cut by half or nearly two million.
Villanueva pointed out that private schools are partners of the state in educating the youth.
“Surely, it was not the legislative intention of our colleagues” to stop schools from availing themselves of tax relief equivalent to 1 percent of special corporate income tax or raising corporate income tax for educational institutions to 25 percent from 10 percent, explained Villanueva, who is also vice chair of the Senate basic education committee.
“We want to alleviate the burden of over 14,435 private basic education institutions, 1,729 private universities and colleges, and 4,001 private technical and vocational institutions in our country,” Villanueva said.