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Tuition hikes loom due to tax hike, says group

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ABS-CBN News

MANILA - A looming 150 percent increase in corporate income tax for private schools will lead to tuition hikes if not the shutdown of schools, a group of private schools warned Friday. The Coordinating Council of Private Educational Associations of the Philippines warned that more private schools may shut down following the issuance of BIR&#x27;s Revenue Regulation 5-2021, which increases the tax rate for proprietary educational institutions from 10 to 25 percent.&quot;Sigurado (Certainly), the cost of education will go up... Kung hindi man magsara (If it will not close down), it will drive the cost higher,&quot; Cocopea managing director Joseph Noel Estrada told Teleradyo&#x27;s &quot;Sakto&quot;.Data from the Department of Education as of September 2020 showed that nearly 900 private schools had suspended their operations due to the pandemic, when many families struggled financially.<ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/news/09/14/20/865-private-schools-suspend-operations-this-school-year">865 private schools suspend operations this school year</a></li></ul><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=1703934" width="100%"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div>Cocopea, which represents about 2,500 private schools and education stakeholders, has asked the Court of Tax Appeals to stop the implementation of the BIR regulation.The petitioners opposed a provision in RR No. 5-2021 which inserted the phrase &quot;non-profit&quot; in the definition of PEIs. They argued that the new BIR regulation was inconsistent with Sec. 27 (B) of the Tax Code because the term &quot;non-profit&quot; only pertained to hospitals.<ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/news/06/09/21/private-schools-ask-court-to-halt-tax-hike">Private schools ask court to halt tax hike</a></li></ul>Several senators have also urged the BIR to rescind the policy, which is feared to lead to more school closures.<ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/news/06/07/21/more-senators-urge-bir-to-revoke-tax-hike-on-private-schools">More senators urge BIR to revoke tax hike on private schools</a></li></ul>Malacañang, however, said it supports the BIR regulation, saying it followed the original definition of the Tax Code when it crafted the new ruling.<ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/video/news/06/10/21/palace-backs-tax-hike-on-private-schools">Palace backs tax hike on private schools</a></li></ul>Estrada said the BIR&#x27;s regulation runs counter to Republic Act 11534 or Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which grants a temporary reduction of the concessionary income tax rate of proprietary educational institutions (PEIs) from 10 percent to 1 percent for the next 3 years.He lamented that private educational institutions did not receive government subsidy during the coronavirus pandemic as it faces financial losses and dwindling enrollment.&quot;Wala pong direktang subsidy sa mga eskuwelahan... Except of course &#x27;yong mga loans, utang naman po &#x27;yon. Hindi naman talaga &#x27;yon tulong,&quot; he said. (There&#x27;s no direct subsidy to schools... Except of course the loans, which are still debts. It&#x27;s not really help.)However, he noted that students and school employees have received pandemic aid from the government.

A looming 150 percent increase in corporate income tax for private schools will lead to tuition hikes if not the shutdown of schools, a group of private schools warned Friday.

A looming 150 percent increase in corporate income tax for private schools will lead to tuition hikes if not the shutdown of schools, a group of private schools warned Friday.