EIGHTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
)
Third Regular Session 
)
SENATE
71 SEP 20 P12 -01
COMMITTEE REPORT No.
311
Submitted by the Committee on Ways and Means on SEP 2 0 2021 
Rc: Senate Bill No. ^407
Recommending its approval in substitution of Senate Bill No. 2272 taking into consideration House Bill 
No. 9913.
Sponsor: Sen. Pia S. Cayctano 
MR. PRESIDENT:
The Committee on Ways and Means to which were referred Senate Bill No. 2272, introduced by 
Senators Angara, Villanueva, Recto, Zubiri, Binay, Gatchalian, Poe, Gordon, Pangilinan, Hontiveros, 
Pacquiao, Rcvilla, Villar, and De Lima, entitled:
AN ACT
AMENDING SECTION 27 (B) OF THE NATIONAL INTERNAL REVENUE 
CODE, AS AMENDED, AND FOR OTHER PURPOSES
and House Bill No. 9913, introduced by Representatives Salccda, Benitez, Rodriguez, Villafucrtc, 
Tambunting, et al., entitled:
AN ACT
CLARIFYING THE INCOME TAXATION OF PROPRIETARY EDUCATIONAL 
INSTITUTIONS, AMENDING FOR THE PURPOSE SECTION 27 (B) OF THE 
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED
has considered the same and has the honor to report these back to the Senate with the recommendation 
that the attached bill. Senate Bill No. <3407 
^ prepared by the Committee, entitled:


AN ACT
AMENDING SECTION 27 (B) OF THE NATIONAL INTERNAL REVENUE 
CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES
be approved in substitution of Senate Bill Nos. 2272 taking into consideration Mouse Bill No. 9913 with 
Senators Angara, Villanueva, Recto, Zubiri, Binay, Gatchalian, Poe, Gordon, Pangilinan, Hontiveros, 
Pacquiao, Rcvilla, Villar, Dc Lima, and Cayetano as authors.
Respectfully Submitted:
PI A S. CAYETANO 
Chairperson
SONNY ANGARA 
Vice Chairperson
Members
/
/
CHR 1SToi^tI :R LAWRENCI*: T. GO 
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PANFILO M. LACSON
WIN GATCHALIAN


LITO" M. LAPID
A/ .
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RONALD “B4T0 DEL A ROSA
EMMANUEL ,,MANNY,,D. PACQUIAO
GRACE POE
RAMOXBONG REVILLA, JR.
I RANCIS “KIKO
with reservation i6 amend 
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mtiESrVfARCOS
KISA IIONTfV EROS
m. i>n iAma
Ex-Offlcio Memhers
/
'-21
JUAN MIGUEL “MIGZ” F. ZUBIRI 
Majority Leader
FRAI^fLlN M^DRILON 
jnority Leader


RyyLl’H ^RE/rO
Senate President Pro-Tempore
VICENTE C. SOTTO III
President
Senate of the Philippines 
Pasay City


EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
Third Regular Session 
)
•21 SEP 20 R2 -01
SENATE
S. No. 2407
Ri:
1^' ■
(In Substitution of S.B. No. 2272, and taking into consideration H.B. No. 9913)
Prepared by the Committee on Ways and Means with Senators Angara, 
Villanueva, Recto, Zubiri, Binay, Gatchalian, Poe, Gordon, Pangilinan, 
Hontiveros, Pacquiao, Revilla, Villar, De Lima, and Cayetano as authors
AN ACT
AMENDING SECTION 27(B) OF THE NATIONAL INTERNAL REVENUE CODE 
OF 1997, AS AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
SECTION 1. Section 27(B) of the National Internal Revenue Code of 1997, as
2 
amended, is hereby further amended to read as follows:
3 
(B) [Proprietary—BduGational—Institutions—and—Hospitals,—Proprietary
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eduGationaMnstitutions-and-hGspftals-whiGh-are-non-pFQfif] HOSPITALS
5 
WHICH ARE NON-PROFIT AND PROPRIETARY EDUCATIONAL
6 
INSTITUTIONS shall pay a tax of ten percent (10%) on their taxable
7 
income except those covered by Subsection (D) hereof: Provided, That
8 
beginning July 1, 2020 until June 30, 2023, the tax rate herein imposed
9 
shall be one percent (1%): Provided further, That if the gross income from
10 
unrelated trade, business or other activity exceeds fifty percent (50%) of
11 
the total gross income derived by such educational institutions or hospitals


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2
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5
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from all sources, the tax prescribed in Subsection (A) hereof shall be 
imposed on the entire taxable income. For purposes of this Subsection, 
the term 'unrelated trade, business or other activity' means any trade, 
business or other activity, the conduct of which is not substantially related 
to the exercise or performance by such educational institution or hospital 
of its primary purpose or function. ‘Proprietary’ means a private hospital, 
or 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, in accordance with existing laws and regulations.
12 
SEC 2. Implementing Rules and Regulations. - The Department of Finance
13 
shall promulgate the necessary rules and regulations for the effective implementation
14 
of the provisions of this Act.
15 
SEC 3. Separability Clause. If any portion or provision of this Act is
16 
subsequently declared invalid or unconstitutional, other provisions hereof which are
17 
not affected thereby shall remain in full force and effect.
18 
SEC 4. Repealing Clause. - All laws, decrees, executive orders, rules and
19 
regulations or parts thereof, which are inconsistent with this Act, are hereby
20 
repealed, amended or modified accordingly.


1 
SEC 5. Effectivity. - This Act shall take effect fifteen (15) days after its
2 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,