Palace backs corporate income tax hike on private schools

MANILA, Philippines — Malacañang on Thursday said it is supporting the increase in corporate income tax of private schools.

Presidential spokesperson Harry Roque said the Palace is supporting the position of Finance Secretary Carlos Dominguez II, who stood firm on the Bureau of Internal Revenue’s (BIR) decision to impose higher income tax on private schools.

Dominguez stood firm on the BIR regulation, noting the bureau followed the original definition of the Tax Code when they crafted the new ruling.

“Nagsalita na ang ating kalihim na Secretary of Finance and we, of course, support the position of the Secretary of Finance, na ‘yung interpretasyon ng BIR doon sa non-profit schools na dapat 100% ng kinikita nila ay hindi napupunta sa any other purpose other than for the purpose of the school is pursuant to the CREATE law and pursuant to establish jurisprudence,” Roque said in a Palace briefing.

(The Secretary of Finance has spoken and we support his position that the interpretation of the BIR is pursuant to the CREATE law and pursuant to establish jurisprudence.)

Two of the country’s largest associations of private schools, along with 31 colleges and universities, have petitioned the Court of Tax Appeals (CTA) to stop the BIR from increasing their corporate income tax by 150 percent, saying the move violated both the Tax Code and the Constitution.

Private schools earlier warned that more private schools may be forced to close down or raise their tuition due to an “ill-timed” regulation by BIR to raise their income tax rate by 150 percent.

Separately, Senators Ralph Recto and Sonny Angara also called on the BIR to reverse its ruling, which also doubled private schools’ existing tax rate from 10 percent to 25 percent.

/MUF