Education VAT is illogical

Eminent educationists think imposing value added tax (VAT) on private universities is illogical, unfair and contradictory to the government's education policy.

The VAT decision stemmed from the government's perception that children from only the rich families study in private universities and the institutions make huge profits, they believe.

However, they said, most students of these universities actually come from the middle and lower-middle class groups for whom the existing tuition fees are already quite heavy. And the 7.5 percent VAT will overburden them.

The educationists suggested withdrawal of VAT and better governance of the private educational institutions.

The Daily Star has talked to them as thousands of students came out on the streets across the country yesterday, especially in the capital where they blockaded major roads, paralysing traffic.

"Education is not a commodity. It is being turned into a commodity. This should stop," said Prof Serajul Islam Choudhury, terming VAT on private universities unexpected, unreasonable and unethical.

Though the government is saying the VAT would be payable by the universities, not the students, but the burden would ultimately be passed on to the students in one way or the other, he said.

Students go to the private varsities not by choice, but because the public varsities cannot accommodate them, Prof Choudhury said.

Also, it is not true that all the students of these institutions come from rich families. In fact, most are from middle- and lower-middle-income households who find the existing fees already very high, he noted.

"If VAT is imposed on top of it, it will have negative impacts on their education.

"If the government feels the varsities are making profits, it can impose tax on them, but not VAT," said the professor emeritus of Dhaka University.

Prof Nazrul Islam, former chairman of the University Grants Commission, too thinks that VAT on education is illogical and it should be withdrawn.

The National Board of Revenue's argument that students would not have to pay the VAT is confusing because it's always the consumers who pay the VAT, he observed.

"Even if the students are exempted from paying the VAT for now, the universities might just increase other fees on some pretext.

"Though there are questions over the quality of education in many private universities, some of them are doing well."

So, what the government should first do is to bring all the private universities under proper rules to ensure quality education, Prof Nazrul suggested.

Prof Syed Manzoorul Islam of Dhaka University said the imposition of VAT is contradictory to the government's policies as, through this move, it accepted that the universities are doing business.

"The National Education Policy considers education as a right, not a product. But by levying VAT, it is being regarded as a product," he pointed out.

By imposing VAT, the litterateur said, the government is actually allowing two education systems in the country -- under one, students are studying at a lower cost at public universities while under the other, they are struggling with high tuition fees at private universities.

"This is unacceptable ... If the VAT burden falls on these students, it will prove to be a weakness on the government's part," said Syed Manzoorul Islam, who teaches English literature at the DU.

Economist Dr Hossain Zillur Rahman said the government perhaps made the move to increase its revenue earnings.

He, however, questioned the process leading to the government decision to impose VAT on the privately run universities. "Has there been any inclusive debate on it?"

"The issue of governance in the private universities is crucial ... But is the government ensuring quality education at these universities? And what measures has it taken to this end?" said the executive director of Power and Participatory Research Centre.