Finance Minister Abul Maal Abdul Muhith has proposed value-added tax (VAT) imposition on private Universities, medicals and engineering colleges.
He also proposed an increase of VAT on English medium schools from 7.5% to 10%.
Educationists have criticised the government's proposal of imposing VAT on private educational institutions, immediately after the minister made the proposal while presenting his budget speech in Parliament.
In his proposal, Muhith said: “Although VAT at a truncated rate of 7.5 percent is currently levied on English Medium School; the Private Universities, Private Medical Colleges and Private Engineering Colleges are still beyond the boundary of the VAT net.
“I hereby propose to bring these sectors under VAT net as well. However, in order to keep the tax burden at a rational level, I propose to impose VAT at the truncated rate of 10 percent on these sectors. ”
VAT on private universities discriminatory and unexpected
Educationists have criticised the government's proposal to levy value added tax (VAT) on private universities and medical and engineering colleges, saying it would be a barrier for the expansion of higher education.
In his reaction, educationist Prof Rafiqul Islam said: “VAT on education sector is unacceptable under any circumstances. Our higher education sector will be hampered. It is discriminatory as such VAT has been imposed only on private educational institutions. Higher education would be costlier. So I think government should reconsider it.”
Educationist Prof Hafiz GA Siddiqi said: “Primary education is important, but now higher education is more important. Higher education should be promoted seriously, especially in the science and technology sectors.
“The decision of imposing 10% VAT is a barrier for higher education. This will make higher education costlier. The government should give some subsidy in the private sector, but imposing VAT is unexpected. Yes, there are questions about the quality of some private universities. Higher education is a public good and it is the responsibility of the government to ensure it. As the private sector has come forward to do this, they should be encouraged.”
