By Ernie Reyes
MANILA — Opposition Senator Leila M. de Lima bewailed the regulation issued by
the Bureau of Internal Revenue (BIR) imposing a 25% corporate income
tax on private schools.
De Lima filed Senate Resolution (SR) No. 766 urging Mr. Duterte to
suspend the implementation of BIR’s Revenue Regulation (RR) No.
5-2021, which, in effect, canceled the 1% rate offered by the pandemic
rescue package under Republic Act No. 11534, or the “Corporate
Recovery and Tax Incentive for Enterprises (CREATE) Act.”
“In issuing implementing regulations to enforce provisions of the
CREATE Act, the implementing agency must be guided by the purpose for
which the measure was legislated,” she said.
“However, when the BIR took it upon itself to modify what was not
intended to be modified, it turned what was meant to be a form of
assistance into an oppressive provision that could lead to educational
institutions to the brink of extinction,” she added.
Section 6 of the CREATE Act amended Section 27 of the National
Internal Revenue Code of 1997 (NIRC), thereby granting a tax rate of
1% beginning July 1, 2020 until June 30, 2023 to Proprietary
Educational Institutions which are non-profit.
Instead of imposing a 1% rate under the pandemic rescue package of the
CREATE Act, RR No. 5-2021 imposed a 25% corporate income tax on
De Lima, Chairperson of the Senate Committee on Social Justice,
Welfare and Rural Development, said “misinterpreting what was
otherwise plain and clear runs contrary to the intent of the law and
cuts through its very soul”.
“Private schools are the State’s allies which assist it in carrying
out the duty to educate the youth in whose hands the future of this
nation depends on. In unduly withdrawing a legislative grant, the
disastrous consequences will be so far-reaching that it would
essentially lead educational institutions to their demise,” she said.
When the BIR inserted the modifier “non-profit schools” in RR No.
5-2021 which cannot be found in the definition of the proprietary
schools in the NIRC as amended by the CREATE Act, De Lima said it
stepped outside the limits of its power and usurped legislative power,
or what is known in law as an ultra vires act.
“While the power to tax has been said to be the power to destroy, the
said power must be used justly and not treacherously in order to
maintain the public’s trust and confidence in the government. It must
still be exercised with caution to minimize the injury to the
proprietary rights of taxpayers,” she said.
Moreover, De Lima stressed that “it behooves upon the Senate to appeal
to the President” to suspend the implementation of RR No. 5-2021 while
Senate Bill (SB) No. 2272, which seeks to further amend a section of
the NIRC to address BIR’s faulty interpretation of a provision under
CREATE, is being discussed.
“The Senate from which this measure emanated from, and whose intent
runs through the veins of the said measure, must assert the spirit of
the law. It should not stand idly by while executive agencies
substitute the Senate’s will and purpose much to the detriment of the
people,” she said.
“We must not await the further deleterious effects of the regulation
to continue to inject its venom which would inevitably cause closures,
loss of employment and ultimately injuring the right to education of
our youth,” she added.
“Pangulong Duterte, hindi po lahat ng mga magulang na nangahas ipasok
ang mga anak nila sa ‘private schools’ ay mga lumalangoy sa pera at
hindi naaapektuhan ng paghihirap at kawalang-kasiguraduhan dulot ng
pandemya, pati na ng magiging epekto nito sa ekonomiya sa susunod na
mga panahon. Karamihan po sa kanila ay ordinaryong mga manggagawa na
naghihigpit ng sinturon para lamang mabigyan ng magandang edukasyon
ang kanilang mga anak,” said the Senator.
“Imbis na gipitin, ito ang panahon para bigyan ng kaluwagan,
kapayapaan ng isip at pag-asa ang ating mga kabataang mag-aaral at ang
kanilang mga magulang,” she added. “After all, the education of the
youth is always a good investment for any society to prioritize.”
Data from the Department of Education (DepEd) showed that “at least
865 private schools have suspended their operations for this school
year due to low enrollment and inability to meet the requirements of
learning management systems for the conduct of distance learning.”
The same led to the displacement of around 4,400 teachers and forced
students to transfer to public schools, according to DepEd. (ai/mtvn)