AIRING fears thousands more will be rendered jobless, Senate Minority Leader Frank M. Drilon prodded President Duterte to direct the Bureau of Internal Revenue to promptly revoke an “erroneous order” issued by the BIR imposing a 25 percent corporate income tax on private schools.
Drilon deplored as “ill-conceived and ill-timed” the issuance of Revenue Regulation (RR) 5-2021, warning that “the BIR order can force private schools to permanently shut down,” leaving thousands jobless as PHL’s unemployment rate rises to 8.7 percent in April.
The opposition Senator suggested that Malacañan can avert the negative impact of the “erroneous” RR 5-2021. Drilon added the regulation was found not only to be “ill-conceived and ill-timed” but also “a classic case of legislation by IRR [implementing rules and regulation].”
“I urge the President and the BIR to heed the call of private schools and heed the appeal of senators to recall RR 5-2021,” Drilon said.
Moreover, the senator stressed that “It has no basis in CREATE and it defeats the very purpose of CREATE law,” referring to the Corporate Recovery and Tax Incentives for Enterprises Law.
In a statement, Drilon denounced the BIR order as “a classic case of legislation by IRR.” He recalled that the Corporate Recovery and Tax Incentives for Enterprises, signed into law in March, introduced reforms to the corporate income tax and incentive systems, stressing it was meant primarily to ease the burden on corporations due to the pandemic.
Drilon explains “this is the reason why, for two years, the law lowers the income tax of proprietary educational institutions to only 1 percent,” noting this was “in recognition of the hardship these institutions had to suffer through, many of which have been forced to close down or whose enrollment has substantially declined, he added.
The lawmaker laments that “such an erroneous and onerous interpretation of the law can jeopardize thousands of private schools in the country.” He warned that BIR Regulation 5-2021 “could potentially be the last nail in the coffin’ for some of these private schools which barely survived the effects of the pandemic.” Drilon also aired concerns reaching his office the BIR’s order could “force private educational institutions to permanently close down, leaving thousands of teachers and non-teaching staff unemployed,” Citing reports by the Department of Education, Drilon added around 750 private schools closed down in 2020 due to the pandemic, affecting around 3,200 teachers. “Maawa naman po tayo sa naghihikahos na private schools sa bansa. Huwag na po nating pahirapan pa.
Instead, let’s help them get back on track,” Drilon pleaded.
He likewise noted reports that the Philippine unemployment rate rose to 8.7 percent in April 2021, equivalent to 4.14 million jobless Filipinos, an increase of over 700 thousand from the 3.4 million recorded last March 2021.
Drilon warns that the ranks of unemployed could swell due to BIR, saying: “Baka madagdagan ang unemployed kapag [nagsara ang mga] private schools sa bansa dahil sa BIR.” [The ranks of jobless may swell when private schools in the country close due to the BIR.]
The Senator suggests the BIR “should not legislate through IRR,” adding that BIR “only needs to read the legislative records and transcripts to confirm that it has gravely erred in issuing RR 5-2021.”
According to Drilon, “the prevalence of this practice is lamentable for it defeats the purpose of the law crafted by the legislature and it alters the true intent of Congress.”
He also called on Congress asking lawmakers to assert and step on the brakes.
“We should put a stop to this kind of erroneous and misplaced interpretation of the law by executive agencies.”
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