VAT too has been increased on mobile phones, while menstrual hygiene products have been exempted from it
Finance Minister AHM Mustafa Kamal, in his budget speech in parliament on Thursday, proposed imposing a 15% tax on the total income of private educational institutions, a move which may end up becoming a burden for thousands of students.
The effects of the proposed tax on private colleges, private medical colleges, dental and engineering colleges, and private universities may ultimately trickle down to the students.
Many students and guardians fear the educational institutions will increase tuition fees and other expenditures if the finance minister’s proposal is eventually implemented.
This will mean double trouble for both students and guardians as they are already facing a financial crisis caused by the coronavirus pandemic, they said.
“We are doing online classes and the university authorities did not reduce our tuition fees at all. In such conditions, if the government imposes a tax on them, then we will be the victims. They will increase our tuition fees to earn more money,” said a worried private university student.
Teachers also unhappy
“In civilized countries, there are no rules to impose income tax on private universities,” said a professor who is an adviser to a private university. Preferring anonymity, he strongly opposed the finance minister’s proposal.
He continued: “The university authorities do not spend the money [profit earned] for their own expenses because private universities are non-profit organizations; rather they develop the education system, give scholarships to students, buy land to expand university premises and do other development work. If they have to give 15% income tax to the government, then there is no alternative to increasing tuition fees.”
Sheikh Kabir Hossain, President of the Association of Private Universities of Bangladesh (APUB), urged the government to revise the decision before finalizing the budget.
He said: “During the Covid-19 situation, even as the private universities are facing a fund crisis, the imposition of a 15% income tax on them by the government will exacerbate the crisis even more.”
Mobile phones to get costlier too
Imran Hossain, a medical student, wanted to buy a new phone this year as he has to do online classes regularly. His choice was a smartphone of a foreign brand because he had little trust in the products manufactured in Bangladesh.
However, in the 2021-22 fiscal year’s budget, the Value Added Tax (VAT) on mobile phones has increased to 25% from last year’s 10%. As a result, it is obvious that the price of mobile phones will increase and now he is anxious about how he will manage the money to purchase a good phone.
The prices of imported juices, fruits, tiles, kitchenware, cosmetics and a few other things will also increase.
VAT exemption on menstrual hygiene products
Meanwhile, sanitary napkins being an important commodity for women, they appreciate the VAT exemption on it.
However, Taheatul Jannat Remi, the founder of Nandita Suraksha, a platform that works to ensure menstrual hygiene products for marginalized women and adolescents in Bangladesh, does not consider it in such a positive light.
She said: “One who can buy a packet of sanitary napkins for Tk100 can very well buy a packet for Tk110. So, it won’t change the situation for rural women. They still cannot afford it.”