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Dhaka Tribune

PM shows real leadership on VAT

Update : 14 Sep 2015, 06:35 PM

We applaud the decision by Prime Minister Sheikh Hasina to withdraw the VAT charge imposed on private universities.

It reverses the controversial budget move to impose 7.5% VAT, originally proposed as 10%, on private universities, medical and engineering colleges.

Following the PM’s directive to Monday’s cabinet meeting, the Finance Ministry and National Bureau of Revenue have confirmed that this levy will now be withdrawn.

It brings to a close the prospect of private universities having to increase tuition fees or cut services to pay VAT. The additional burden this threatened to impose on the 450,000 students of private universities and their parents, would have been highly discriminatory.

By taxing the resources available to private universities, it would have severely undermined their ability to perform the core public service function of expanding education which is the basis of their status as not-for-profit trusts.

The prime minister demonstrates true leadership by showing her ability to listen and respond to the wide-spread public objections to the VAT proposal. It shows sound judgment and common sense on her part to change a government policy, even after several months of senior ministers striving to justify the controversial levy.

Credit should also be given to the private university students who have been peacefully demonstrating on this issue over the past week. It is heartening to see their efforts rewarded.

Ultimately, this is a vindication of the overwhelming arguments against imposing VAT on education. The strong case against this has received support from many quarters including from the BCL president Saifur Rahman Sohag speaking at Dhaka University on Monday.

We hope the leadership shown by the prime minister will lead to a closer relationship between the government and private universities in working to improve access to and quality within the nation’s higher education system.

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