BIR suspends higher taxes for private schools amid pandemic

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Metro Manila (CNN Philippines, July 29) - The Bureau of Internal Revenue has suspended the implementation of a new regulation imposing higher taxes on private schools amid the ongoing health crisis.

The BIR also noted that the bills clarifying a provision in the Corporate Recovery and Tax Incentives for Enterprises law on taxation of private educational institutions are still pending in Congress.

“To ease the burden of taxation among proprietary educational institutions, especially during this time of COVID-19 pandemic, and taking into account the pending bills in Congress...to finally clarify the income taxation of schools, the implementation of the following provisions of Revenue Regulations No. 5-2021 dated April 8, 2021 are hereby suspended pending passage of such appropriate legislation,” read Revenue Regulations No. 14-2021.

The new regulation was signed by Finance Secretary Carlos Dominguez III on July 27.

With the suspension of RR No. 5-2021, non-profit private schools can continue to avail of the 1% preferential tax rate.

The suspension of the regulation, which is supposed to increase the income tax rate of private schools by 150%, comes after some lawmakers and the education sector asserted that the higher tax rate might force more schools to close down.