The Association of Private Universities of Bangladesh (APUB) has requested the authorities to unfreeze the bank accounts of private universities held by the National Board of Revenue (NRB) before Eid.
The plea was made in a letter signed by Sheikh Kabir Hossain, president of the association, on Sunday.
The letter said an order was issued by the court on February 27 mandating all private universities in the country to pay a 15% tax. The detailed order of the Appellate Division has not yet been published.
Nevertheless, the NBR has sent letters for tax payments to various private universities, leading to the freezing of the bank accounts of many universities.
It is inhumane to suspend the university's bank accounts before the biggest religious festival for Muslims, Eid-ul-Fitr, without providing an opportunity for the full court verdict to be published and the necessary steps taken to pay taxes according to the court order, the letter said.
As a result, it will not be possible to pay the salaries, bonuses, and other bills of a large number of teachers, officers, and employees of the universities, it adds.
The APUB, the organization of the founders of private universities, is always trying to conduct all activities according to the prevailing law of the country.
The letter adds that the general funds of private universities depend solely on tuition fees from students, excluding any form of government grant. The significant government VAT and taxes are paid for expenses such as salaries and allowances for university teachers and staff, purchase of educational materials and laboratory equipment, land purchase, and construction of campus facilities.
After covering all university expenses, if any surplus funds (if available) are accumulated through savings, they are used for maintaining university standards, research programs, campus construction, expansion, hostel construction, transportation management, and other long-term projects.
According to section 44 (7) of the Private University Act 2010, it is mentioned that the money of the general fund of the university cannot be spent for any purpose other than the necessary expenditure of the university.
In this case, the entrepreneur-founders cannot receive any money from the general fund of the non-profit private university recognized by the law, as well as paying income tax or spending it in other ways is also a direct violation of the Act.
Hence, the APUB believes it is very important to discuss with the stakeholders and change the various sections of the Private University Act and the Tax Act with the effective assistance of the authorities to determine the proper steps of the private universities falling into crisis.
The NBR issued a gazette notification on June 28, 2007, imposing the 15% income tax on private universities, to be effective from July 1 of that year.
In another gazette notification, the NBR imposed the same 15% income tax on private universities, medical, engineering colleges and ICT institutes.
After that, different universities filed 46 petitions challenging the government's decision.
Upon the final hearing on the petitions, the High Court on September 5, 2016, found the notifications illegal, thus ordering the NBR to refund the money realized in line with the government circulars.
Subsequently, the state pleaded to be allowed to file a leave to appeal with the apex court, which was finally granted on February 9, 2021.
The Appellate Division also stayed the High Court order on refunding money to the private universities.
On April 6, 2023, the Appellate Division of the Supreme Court upheld a High Court order asking the NBR not to collect income tax from private universities in the country.