THE SENATE on Monday approved the measure clarifying the tax provision on private educational institutions.

Voting 23-0, the senators passed on third and final reading Senate Bill 2407 that will clarify that all private schools — both “non-profit” and “for profit” — are entitled to the one percent preferential tax rate under the Corporate Recovery and Tax Incentives for Enterprises Law, which was enacted last March.

Senate Ways and Means Committee Chairperson Pia Cayetano, sponsor of the bill, said private school institutions are the government’s partners in delivering quality education to the youth and in molding them to become changemakers and responsible leaders of the future.

“This partnership is even more crucial today as our nation struggles with Covid19, which has disrupted educational systems and the formal learning of our current generation of students,” Cayetano said.

The senator noted that many private schools are in a critical state, citing data from the Coordinating Council of Private Educational Associations of the Philippines showing that enrollment among its member-schools has declined to 60 percent this school year, compared to 2020.

In her sponsorship speech, Cayetano recounted the circumstances that led to the filing and approval of the tax relief measure from the passage of CREATE, which brought reprieve to proprietary educational institutions by lowering their 10 percent preferential tax rate to one percent for a period of 3 years, specifically from July 1, 2020 until June 30, 2023.

However, on April 8, 2021, the Bureau of Internal Revenue issued Revenue Regulation No. 5-2021 that specifically stated that only “non-profit” proprietary educational institutions can avail of the preferential tax rate under CREATE.

This prompted the filing of SBN 2272 by Senator Juan Edgardo Angara.

Cayetano said that it is important to give the public a fair and full picture of the circumstances that led to the filing of Senate Bill 2272, which was substituted by SBN 2407 under her committee report.

She said that SBN 2407 will help the Philippines keep track with its goal to ensure quality education, which is part of the government’s commitments under the Sustainable Development Goals, particularly SDG 4.

“This is the power of dialogue at work, involving all stakeholders,” Cayetano said.