BY GILBERT P. BAYORAN
Good news for private schools.
Private schools may now avail of lower tax rate under RA 11534, known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
Third District Rep. Jose Francisco Benitez yesterday said that the CREATE act will help reduce operational costs of private schools during these challenging times, as he is hopeful that it will provide fiscal space for new investments to transition to digital learning.
Benitez made the statement after President Rodrigo Duterte has signed a law reducing the preferential tax rate of 10 percent to 1 percent imposed on proprietary educational institutions.
Proprietary education institutions refer to any private school maintained and administered by private individuals or groups with an issued permit to operate from the Department of Education (DepEd) or the Commission on Higher Education (CHED), or the Technical Education and Skills Development Authority (TESDA), as the case may be, based on existing laws and regulations.
Albay Rep. Joey Salceda, chairperson of House committee on Ways and Means who authored the bill, said that the new law is expected to help private schools hire more teachers and keep existing staff through tax relief.
He noted that applying the reduced 1 percent preferential rate under RA 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act until 2023 would allow schools to save an equivalent of 3.43 percent of compensation expenses, which could help them rehire at least 12,996 teachers at the start of the next school year.*