We are surprised that the Finance Minister AMA Muhith is still arguing that it is private university authorities, not students, who will pay the VAT imposed by the government on private universities.
He must realise by now that semantic debates and word games about who actually pays this tax, will not help improve the government’s case. However it is described, this is still a tax on education.
Everyone can see that for a private university to pay 7.5% VAT without increasing tuition fees as the minister is insisting to reporters, it will have to cut costs and expenditure. For many institutions, such a change may seriously compromise the quality of the education it can provide. It is far more logical and natural then to expect private universities to ultimately pass on the VAT charge to their students via their tuition fees.
The real question for the government to answer is whether it can show more public good being served via it imposing VAT on private universities, or less?
We strongly urge the minister to reconsider the government’s position as all the evidence points to private universities providing a very important public service, which will only be undermined by this unnecessary new tax.
To date, the main justification the minister has made in this regard is to boldly state “I have to collect revenue, and the private universities are logically a big of source of that.” Not only does this ignore far bigger sources of revenue, but it undermines the constitution’s guarantee of free choice in education, by discriminating against private providers.
Over 450,000 students already attend private universities. They play a crucial role by providing healthy competition and fulfilling the rising demand for higher education in Bangladesh.
Making attendance costlier will only impose hardship and hinder access to higher education. Restricting private universities may incentivise more people to go abroad, while doing nothing to improve access to public universities.
With spaces at public universities in short supply, it is a mistake to impose extra costs on the students of private higher education institutions as the disadvantages created will far outweigh revenue gains to the government.