Although the government yesterday assured that only the private universities will carry the burden of VAT on education, university authorities are now saying it would be the students who will ultimately pay the price.
Yesterday’s remarks from the finance minister or the NBR failed to quash the long-standing concerns that the private universities would eventually collect extra tuition fees from their students to pay the 7.5% value-added tax.
Instead, there were further confusion as different stakeholders continued to issue contradictory remarks.
“How come the universities have to pay the VAT? The government is seeking VAT on money collected from students as tuition fees, so we cannot pay it by our own. Rather it is the students who will ultimately have to pay it,” said Sheikh Kabir Hossain, president of Association of Non-Government Universities of Bangladesh
Terming the finance minister’s statement nothing but “childish behaviour,” he told the Dhaka Tribune that the government should withdraw the VAT altogether rather than changing its stance.
Yesterday, Finance Minister AMA Muhith said private university authorities, not the students, will have to pay VAT on education without increasing any tuition fee. The NBR also issued a similar statement, giving the universities the responsibility of paying the VAT that was already “included in the current tuition fees.”
Mohammed Farashuddin, chairperson of the East West University board of trustees, slammed the government for making contradictory statements.
“If it [VAT] was already included in the tuition fee, why did the government feel the need to include it again by announcing it in the budget?”
Farashuddin said his university cannot make any decision until the National Board of Revenue issues a complete clarification.
Meanwhile, NBR Chairman Nojibur Rahman said the tax authority does not want to create additional pressure on the students, rather it has imposed the VAT so that the revenue can be used for development of the country.
“The universities cannot hike tuition fees to implement the decision; so there will be no pressure on students. They [universities] will pay the VAT after calculating the amount received from students as tuition fees and there should be no confusion,” the NBR chief added.
On June 4, the government proposed to impose 10% VAT on education in private universities, medical and engineering colleges. Later, it was reduced to 7.5% amid demands made by students, guardians and private university owners.
The move triggered mass demonstrations which culminated in Wednesday’s police assault on students and yesterday’s citywide road blockade by private university students.
Even though the government tried to clarify the issue yesterday, agitated students and their parents continued to demand that the VAT on education be scrapped.
“Whatever happens, VAT cannot be imposed on education. The universities will ultimately collect the VAT by raising the tuition fees and the students will ultimately be the sufferer,” said Farhan Habib, an ex-student of University of Liberal Arts Bangladesh, who has been with the student movement since its beginning.
According to the Private Universities Students Alliance of Bangladesh, the student movement will continue until the VAT is scrapped completely.
Concerned parents also told the Dhaka Tribune they would not be able to bear any further expenses as they were already struggling to pay between Tk3 lakh and Tk7 lakh for their children’s four-year education at a private university.
“I have enrolled my son in North South University four months back so that he can be well qualified. I am already under pressure as I have to minimise some of my family costs for continuing his educational expenses,” said Mobarak Uddin Mahmood, a banker by profession.
The decision to impose VAT would create a huge pressure on middle-class families who have one or more children studying in private universities, he added.
According to the University Grants Commission, there are 461,000 students currently enrolled at 83 private universities.