Educational institutions of various types continue to pay value added tax while private universities have been exempted from VAT payment amid student protests.
Students, guardians and authorities of other educational institutions that are still paying VAT consider it ‘discriminatory’ and demanded exemption from VAT payment.
A 4.5 per cent VAT on the fees of students of English medium schools, private medical and engineering colleges and coaching centres was imposed in 2007 by the immediate-past military-controlled interim government and the tax is still in place.
The Awami League-led government in the budget for the ongoing financial year proposed the same amount of tax on fees of private university students.
Protesting at the tax imposition, students of some leading private universities took to the streets in July 26–27 at Banani and Mohakhali in the capital and damaged at least 20 vehicles.
The Dhaka Metropolitan Police arrested seven students on the second day of the protests.
In the face of protests, the finance minister, Abul Maal Abdul Muhith, on July 28 announced withdrawal of VAT on tuition and other fees of private university students.
The guardians of students of VAT-paying educational institutions said their inability to bring out processions forced them to bear expenses on their children’s education.
‘The government is silent about excessively high monthly and session fees in English-medium schools. Without stopping the school authorities from charging their students high, the government has put an extra burden on educational costs by forcing us to pay VAT,’ said Nibedita Ahmed, a guardian of an English-medium student in Dhaka.
The institution authorities along with guardians also said argued for exemption as private university students were exempted from paying the tax.
‘It is discriminatory,’ said a guardian of a private medical college student. ‘Why should we pay the tax to the government which is not taking taxes from private universities, schools and colleges?’ she said.
‘The guardians think we are charging extra fees from them in the name of VAT while they have witnessed exemption granted to private universities,’ the principal of a private medical college said.
He also demanded exemption of VAT on all types of educational institutions.
Some guardians, however, think imposition of VAT on schools was ‘irrational’ but were ready to pay the tax as they were quite solvent.
‘We can bear the extra expenses,’ said Md Naveed Ahmed, a guardian of an English-medium school student in Dhaka. ‘Running schools should not be considered a business. It is irrational to impose VAT on them.’
Middle-income group guardians, who have sent their children to coaching centres, said they could not afford to pay VAT as they were paying high fees for coaching.
‘Expenditure for my child’s education became too much, even more than other household expenses because of the high fees and VAT,’ said Arjun Karmakar. ‘I need to pay through my nose the high fees and VAT to three coaching centres.’
The education minister, Nurul Islam Nahid, told New Age, ‘We have just requested withdrawal of the newly imposed taxes on private universities.’ He said VAT on other institutes was nothing new.
As for VAT exemption for all educational institutions, the minister said, ‘It is for the finance ministry to look into. Ask the ministry for further details.’
