BIR circular did not correct taxes imposed on private schools —COCOPEA

The Coordinating Council of Private Educational Associations (COCOPEA) on Tuesday said the new circular of the Bureau of Internal Revenue (BIR) released earlier this month did nothing to address concerns of the private education sector on the imposition of additional taxes.

In an emailed statement, the COCOPEA said the new Revenue Memorandum Circular (RMC) 76-2021 dated June 11, 2021 merely clarified the illustrative example computations in the Revenue Regulations No. 5-2021.

"Aside from correction of mathematical computations in the examples, there is no change whatsoever in the BIR's current tax policy, which imposes a 25 percent tax on proprietary educational institutions, in contravention of the CREATE Law," it said.

President Rodrigo Duterte in March signed into law the Corporate Recovery and Tax Incentives for Enterprises (CREATE), which reduced corporate income tax to 25 percent for corporations and 20 percent for micro, small, and medium enterprises.

Under the RMC 76-2021, the Regional Operating Headquarters (ROHQ) is given a one percent income tax rate from July 1, 2020 to June 30, 2023, and one percent minimum corporate income tax (MCIT) from  January 1, 2022 to June 30, 2023.

Starting July 1, 2023, the income tax rate will revert to 10 percent for proprietary educational institutions, and a two percent MCIT.

COCOPEA said, however, that the BIR will slap an "onerous" 150 percent tax hike policy to the private educational system as the agency does not consider educational institutions to be entitled to a preferential income tax rate and the concessionary tax rate under the CREATE Act.

"We continue to exhaust all our administrative, legislative, and judicial remedies to correct and stop the implementation of RR 5-2021 on behalf of our member institutions affected," COCOPEA said.

The group also warned that the measures will affect stakeholders -- students, parents, faculty, and other school workers, alumni, and small enterprises dependent on school operations.

According to COCOPEA, the measure could bring about "destructive consequences" such as the closure of more schools.

GMA News Online has reached out to the office of BIR Commissioner Caesar Dulay for comment on the matter, but no response has been received as of this posting.—LDF, GMA News