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Dhaka Tribune

Muhith: Private universities to pay VAT, not students

Update : 10 Sep 2015, 07:40 PM

Finance Minister AMA Muhith yesterday said private university authorities will have to pay VAT on education, not the students.

“The universities will have to pay the VAT without increasing any tuition fee,” the minister told a press briefing in Sylhet.

Value-added tax collection from private universities can be a good source of revenue collection, Muhith said, adding that there was no scope for withdrawing the VAT.

The minister’s comment came as thousands of private university students took to the capital’s streets yesterday protesting the government’s decision to slap 7.5% VAT on their tuition fees.

The finance minister said that after looking at 28 private universities, he has found that every student on an average spent around Tk1,000 per day.

“So, the 7.5% VAT should not be a big amount for the students as it will cost only Tk75 a day,” the minister added.

NBR clarification

Meanwhile, the National Board of Revenue (NBR) also issued a press release yesterday, echoing the comments of the minister.

The VAT was introduced not with an intention to collect new tax from students, but to collect VAT from their existing tuition fees, according to the NBR press release.

“VAT is included in the current tuition fees that the students pay. The universities are completely responsible for paying VAT,” the statement read.

As the VAT was included in the existing tuition fees, there was no scope of increasing the cost of studying at private universities, according to release signed by NBR Public Relation Officer Syed A Mumen.

Protests against the controversial 7.5% VAT have been going on ever since it was first proposed under the budget for the ongoing fiscal year.

Demonstrations reached new heights yesterday when thousands blockaded the streets of Dhaka city, bringing the capital’s traffic system to a near halt.

Student protests also turned violent on Wednesday when at least 23 students and the additional registrar of East West University were injured when the police opened fire and charged truncheons during a demonstration in Rampura.

This is the first time the government has implemented a 7.5% VAT on the fees tuition fees paid for private universities, medical and engineering colleges. 

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