By Russell Louis C. Ku
THE HOUSE Committee on Methods and Means on Monday accredited a proposed legislation that scraps a 150% tax hike on non-public faculties.
In a listening to, the panel accredited the committee report and substitute Home Invoice 9913, which amends Part 27 (B) of the Nationwide Inner Income Code (NIRC) of 1997 to use the ten% preferential tax fee to all proprietary academic establishments and nonprofit hospitals from Jan. 1, 2012 to June 30, 2020.
Nevertheless, the invoice states that no tax credit score or refund may be granted on account of this decreased tax fee in the course of the interval.
Below the invoice, non-public faculties can even be given a decreased tax fee of 1% from July 1, 2020 to June 30, 2023, as offered for beneath Republic Act 11534 or the Company Restoration and Tax Incentives for Enterprises (CREATE) legislation. After the aid beneath CREATE expires, the tax fee will revert to 10%.
“The revenue of nonstock, nonprofit academic establishments not used really, immediately and completely for academic functions shall be topic to the speed of tax beneath this subsection,” in accordance with the invoice.
The Bureau of Inner Income (BIR) lately suspended sure provisions of Income Rules (RR) No. 5-2021 that excluded nonprofit non-public faculties from availing themselves of the preferential tax and successfully elevated the speed to the 25% common company revenue tax.
“To ease the burden of taxation amongst proprietary academic establishments, particularly throughout this time of COVID-19 pandemic, and bearing in mind the pending payments in Congress… to lastly make clear the revenue taxation of colleges, the implementation of the next provisions of RR 5-2021 dated 8 April 2021 are hereby suspended pending passage of such acceptable laws,” the BIR stated in RR No. 14-2021.
Albay Rep. Jose Ma. Clemente S. Salceda, chairman of the Home Methods and Means committee, stated through Viber that the tax hike would have pressured non-public faculties to put off over 20,000 jobs, along with the 80,000 jobs already misplaced in the course of the pandemic.
Mr. Salceda stated in a separate assertion the enactment of the invoice together with the decreased tax fee beneath the CREATE legislation would permit faculties to “save an equal of three.43% of compensation bills, which might assist them rehire no less than 12,996 lecturers firstly of the following college 12 months.”
He expects the invoice to be handed with “little or no” resistance on the Home flooring and hopes for the measure to be transmitted to Malacañang earlier than the 12 months ends.
“I do anticipate some amendments, notably on using tax financial savings in the direction of decrease tuition. These are good amendments in precept, though the query of implementation continues to be there,” he added.
Coordinating Council of Non-public Academic Associations Managing Director Joseph Noel M. Estrada stated the “overwhelming help” for the invoice raises hopes it will be accredited by Congress earlier than the break in September.
“We hope for the enactment of the legislation earlier than finish of the third and final session of this 18th Congress,” he stated through cell message.
The counterpart measure, Senate Invoice 2272, is pending within the Senate Methods and Means committee.