The cabinet has decided to withdraw the VAT from private university tuition fees. I am supposed to be happy and thankful towards our PM for being very kind to students. I am sorry, but it doesn’t really make me all that happy.
In replying to a Facebook post by our state minister for foreign affairs, I wrote: “This may pose serious threats to our future revenue planning.” Private university students applied the trick of blocking diplomatic enclaves, road junctions, and commercially important places to pressure the government into caving in to their demands. People have now started talking about the withdrawal of VAT on English-medium school tuition fees, computers, and maybe on other things considered to be public good sectors as well.
Just the other day, some of my friends were sarcastically telling me: “Your friend Muhith can’t take out a single penny from the Hall-Mark owners, can’t tax the rich or garment owners ... your PM can’t even think of withdrawing tax-free luxury car imports made by members of parliament, and now you guys are serious about imposing VAT on private university students?”
A few of our teachers, who have always championed the private sector-led growth and higher tax-GDP ratio, were quite dismayed with the Ministry of Finance and the NBR. They agree with me that the FM and the NBR goofed up big time. In the same way, ruling party stalwarts, who have always wanted to get the best out of Sheikh Hasina, sowed in her the fear of the opposition gaining from this fiasco.
We want to make way for more taxes and VAT, but we want to keep everybody happy. Is this a joke? Bangladesh has one of the lowest, if not the lowest, tax-GDP ratios in the world. Our per capita income is rising, wealth is concentrated amongst new streams, and there are more houses, more cars, more boutique shops in every corner, and more people travelling abroad. There is more money in circulation, an increase in disposable income, and a higher rise in savings every day.
Bangladesh Bank is reporting drastic rises in millionaire deposits year on year. Our import is up to more than $41bn, our export is up to $32bn, our remittance is $15bn, and our foreign exchange reserve is $27bn -- who does all this money belong to? Are they sharing their successes with regular folk? No. None of the larger companies which are known to be driven by “successful business leaders” are listed with the Dhaka or Chittagong stock exchanges.
Our cabinet, Finance Ministry, and NBR have yet to make any smart moves, from the very outset, no less. Why did they impose a VAT on private university education? Why they didn’t impose income tax on private universities, or, now that a 25% income tax has been imposed on them, why did the NBR not increase this? If they could impose an income tax on private universities through a statutory regulatory order, why not increase that, or enforce this everywhere?
Also, what are they going to do with VAT in English-medium schools? Reviews have revealed that most of these educational institutions hide their profits and show very little earnings or even a loss. Imposing VAT was, therefore, the best solution. Universities are established as trusts, therefore, their motives were supposed to be “public good.” I have been teaching in some private universities, if our teachers, who are now the decision-makers, visit them, they might need to be rushed to the coronary care unit.
No investment on teacher training, no teaching assistants, no scholarships to the poor-but-meritorious students, and the lowest possible provision of books in libraries -- this is the usual scenario in most of our private universities. I asked a friend what his suggestion would be, and he immediately shot back: “Why did the government allow so many private universities in the first place?” Thank God he didn’t mention the accreditation council that we have been talking about for so long. Every university claims to be the best, as one simple success is blown up beyond proportion.
The reason behind my lamenting is not the withdrawal of the VAT. Our politicians are goofing up, our bureaucrats are goofing up, our law enforcers are goofing up, and our policy-planners can’t show us much in the way of hope. We know our youngsters are much more IT-savvy, articulate, and respectful of each others’ opinions.
But most of them are unable to adjust with what is happening around them. We are not allowing them to join the government, public universities, or even politics. It is widely being discussed that most of them also want to go abroad and not come back.
A bad political environment, deteriorating standards of life, the breakdown of social values, and seniors stuck in mediocrity and ugly politics have significantly contributed towards their rising distaste towards their own motherland.
Our policy formation, civil-military bureaucracy, and the government, are getting extraordinarily dependent on a couple of white-haired “intelligent” people, posing a serious business-continuity risk for an otherwise potentially bright future for Bangladesh. Investment on innovation is going down steadily, while hoodlums and apple-polishers are occupying the front-row seats.
