SENATOR Sherwin Gatchalian hailed the signing of a law that will grant tax relief to private schools, saying it will help them stay afloat amid the pandemic.

Republic Act 11635, which President Rodrigo Duterte signed into law on December 10, 2021, amends Section 27B of the National Internal Revenue Code of 1997 to reduce the preferential tax rate imposed on proprietary educational institutions from 10% to 1%.

While the law provides that proprietary educational institutions shall pay a 10 percent tax on their taxable income, the one percent tax rate shall be imposed from July 1, 2020 to June 30, 2023.

The law defines proprietary educational institutions as any private school maintained and administered by private individuals or groups and with a permit to operate from the Department of Education, the Commission on Higher Education, and the Technical Education and Skills Development Authority.

According to Gatchalian, the signing of the law clarifies and reinforces the intention of the Corporate Recovery and Tax Incentives for Enterprises Act or CREATE to provide relief to private schools.

Data from the DepEd showed that because of the pandemic, enrollment in private schools declined by 929,000 — about 643,000 students transferred to the public education system. Meanwhile, 452 private schools suspended their operations or closed down.

“Dahil sa matinding pinsalang dulot ng pandemya sa ating mga pribadong paaralan, higit nilang kinakailangan ang lahat ng uri ng suporta mula sa ating pamahalaan. Kaya naman napapanahon ang batas na magbabawas sa kanilang buwis hanggang sa taong 2023 upang tulungan silang makabangon at maipagpatuloy ang paghahatid ng dekalidad na edukasyon,” Gatchalian said.