Govt can afford to remove VAT on private education – Jagdeo

Government can afford to remove its imposed 14 per cent Value Added Tax (VAT) on private education without significantly harming its revenue framework, according to Opposition Leader Bharrat Jagdeo.
Jagdeo, an economist, calculated that Government could have, and currently can, slash spending in unnecessary areas in order to maintain its desired revenue stream without taxing private education.
Referring to the monies wasted and squandered on the D’Urban Park Project, which amounted to close to $1 billion, Jagdeo said that would have been more than four years of what the parents have to pay on private education.
According to Finance Minister Winston Jordan, the Government has projected to earn over $350 million per year from the VAT on private education.
He had contended that the education tax was necessary because a number of private schools did not pay their full share of existing taxes, but Jagdeo argued that such an explanation defied logic.

“If the private schools are offending the tax, if they are not paying their fair share of taxes, then, by all means, the GRA [Guyana Revenue Authority] should go after them. But you cannot put in place VAT on the parents as a compensatory measure for the transgressions of private schools,” he posited.
The Opposition Leader pointed out that the priorities of the Government were backward, since it could save much more than $350 million per year if it immediately rescinded the salary increases and lavish benefits given to Ministers.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.
He also slammed the Government over its decision to grant beverage giant Demerara Distillers Limited (DDL) a $3.5 billion tax write-off even as it found it appropriate to tax the working class who were struggling to elevate themselves.
Jagdeo continued, “Why are we spending hundreds of millions of dollars fixing up State House or building the Wall of China now by the Office of the President compound? How much does that cost? We don’t know because they haven’t gone to tender.”
He also highlighted that the $12.5 million of taxpayers’ money being handed to Alliance For Change (AFC) financier Larry Singh for the Sussex Street bond could have otherwise been utilised to bolster revenues instead of taxing private institutions.
Former President of the University of Guyana Senior Staff Association (UGSSA), Dr Melissa Ifill had argued that in other Caribbean States which have the same public/private education structure, private schools were in fact given tax breaks and other benefits from the State.
She pointed out that Governments viewed private schools as aiding the Public Sector, as they removed a major burden from the State in providing quality education to masses of students.
Government, even after hosting a post-VAT implementation consultation with stakeholders to address their concerns with the VAT on private education, announced that the tax would remain for this year.
Prime Minister Moses Nagamootoo, who addressed the forum on Friday, said Cabinet would review their concerns, but announced that if any changes were to be made, they would be done until 2018.
Disgruntled stakeholders have pledged to continue their resistance against the Government until it removed the VAT on private education.
Another protest is slated for today outside the Education Ministry from midday.