VAT on private education
– says tax will be reviewed in next year’s budget
The Coalition Administration has formally taken a final decision on the 14 per cent Value Added Tax (VAT) on private tuition: Cabinet, on Tuesday last, decided to let the tax remain for the rest of the year, and have it reviewed for 2018.
of Nations Incorporated, Dr Brian O’Toole holding up placards at
Wednesday’s protest
“The views of stakeholders were reported to Cabinet, and Cabinet took into consideration those views which were made public at that forum; and after having a full discussion on this matter, it was the decision of Cabinet that the VAT on private education would remain in accordance with the budgetary projections for 2017,” Minister of State Joe Harmon told reporters on Thursday.
“It has, however, been agreed that this measure will be reviewed, along with all VAT measures, for the 2018 national budget – preparation of which will start in the month of June,” Harmon said at his regular post-Cabinet media briefing.
The initial announcement of this position was made on Friday last during the consultations held between Government and stakeholders who have been vigorously protesting against the tax imposition on private tuition.
Following that announcement by Prime Minister Moses Nagamootoo, distraught and disappointed stakeholders stormed out of the consultations, and have threatened to continue their resistance against Government in various forms. Several protest actions have since been held, with concerned stakeholders lashing out at the administration for wasting their time and holding a window-dressing exercise.
“He (Prime Minister) could have announced that before (no removal of VAT before 2018), then people could have decided if it was worth their while to spend half their day on an exercise that had very little value,” Director of the Nations University, Educator Dr Brian O’Toole, reasoned.
The educator also lamented Government’s failure to address the concerns of the stakeholders in its rebuttal. “The Prime Minister appeared to (have delivered) a prepared speech. If it wasn’t a prepared speech, it certainly failed to respond to not one of the points mentioned,” he stated.
Dr O’Toole said it was also tragic that Education Minister Dr Rupert Roopnaraine failed to share his views on the concerns raised by students, parents and other concerned citizens during the forum.
Despite Government’s pronouncement, the educator made it clear that the fight will not end until the results are favourable. “I guess the hope for everyone in Government is if you prolong something long enough, people will get tired of it and they will give up; but I know the key players in this won’t give up,” he declared.
President David Granger, during the Public Interest programme on Friday last, has said persons need to be more patient, tolerant and reasonable. The Head of State explained that in fulfilling a campaign promise, his Administration reduced VAT by two per cent and therefore it had to find ways to generate revenues which would be lost from that reduction.
But Opposition Leader Bharrat Jagdeo, at his party’s weekly press conference on Monday, pointed out that Government can afford to drop the imposed VAT on private education, which became effective on February 1, 2017, by slashing spending in unnecessary areas in order to maintain its desired revenue stream.
According to Finance Minister Winston Jordan, Government has projected to earn over $350 million per year from the VAT on private education. He has contended that the education tax was necessary because a number of private schools did not pay their full share of existing taxes, but Jagdeo is arguing that such an explanation defies logic.
According to the Opposition Leader, Government seems to have its priorities backward, since it could save much more than $350 million per year if it immediately rescinds the salary increases and lavish benefits given to ministers.
“The salary increases that ministers took in addition to their benefits will be more than $350 million alone! Are they saying that they have greater priority in terms of needs to State funds than the 20,000 students in Guyana who are going to private institutions?” Jagdeo queried.
Jagdeo has further slammed Government over other “unnecessary spending”, such as the $3.5 billion tax write-off to Demerara Distillers Limited (DDL); sums of money being spent on the “fixing up” of State House and the Ministry of the Presidency; and also the $12.5 million of taxpayers’ money being handed to Alliance For Change (AFC) financier Larry Singh for the Sussex Street bond, which could have otherwise been utilised to bolster revenues instead of taxing private institutions. (Vahnu Manikchand)
