President Rodrigo Duterte has signed a law reducing the preferential tax rate of 10 percent to 1 percent imposed on proprietary educational institutions.
Duterte signed Republic Act (RA) 11635 on Dec. 10, 2021, amending Section 27 (B) of the National Internal Revenue Code of 1997.
“Hospitals which are nonprofit and proprietary educational institutions shall pay a tax of 10 percent on their taxable income except those covered by Subsection (D) hereof: Provided, that beginning July 1, 2020 until June 30, 2023, the tax rate herein imposed shall be 1 percent,” the law, released on Thursday, read.
Proprietary education institutions refer to any private school maintained and administered by private individuals or groups with an issued permit to operate from the Department of Education (DepEd) or the Commission on Higher Education (CHED), or the Technical Education and Skills Development Authority (TESDA), as the case may be, based on existing laws and regulations.
House of Representatives Ways and Means Committee chair, Albay Rep. Joey Salceda, author of the bill, earlier said the new law is expected to help private schools hire more teachers and keep existing staff through tax relief.
“It will help private schools keep their teachers. They already had to fire teachers due to the pandemic. I think the whole committee agrees we should provide them relief,” he said.
He noted that applying the reduced 1 percent preferential rate under RA 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act until 2023 would allow schools to save an equivalent of 3.43 percent of compensation expenses, which could help them rehire at least 12,996 teachers at the start of the next school year.
RA 11635 was passed by the Senate as Senate Bill 2407 on Sept. 27, 2021 and adopted by the House as an amendment to House Bill 9913 on Sept. 29, 2021.
Meanwhile, Duterte also signed the following laws:
1) RA 11599 – An Act Separating the Sito of Ladol from Barangay Poblacion in the Municipality of Alabel, Province of Sarangani and constituting it into a district and independent barangay to be known as Barangay Ladol;
2) RA 11636 – An Act Establishing the Bohol First Congressional District Library in the Municipality of Balilihan, Province of Bohol;
3) RA 11637 – An Act Granting Good News Sorsogon Foundation, Inc. a franchise to construct, install, operate, and maintain radio and television broadcasting stations in the Bicol region; and
4) RA 11638 – An Act Recognizing CCF Life Academy Foundation, Inc. as an education institutional of international character, granting certain prerogatives to hasten its growth.
These laws were also signed on Dec. 10, 2021 but released on Thursday.
Source: Philippines News Agency