VAT to remain on private schools’ fees – President

As public outrage continues to mount over the imposition of the 14 per cent Value Added Tax (VAT) on private school fees, Government seems to be holding steadfast to the move made in the 2017 Budget.

It was reported earlier this week that President David Granger was expected to announce the removal of the tax on private tuition fees. However, the Head of State told reporters on Wednesday that this will not happen.
“My mind is not changed but we had a meeting yesterday (Tuesday) and the Finance Minister explained certain aspects of taxation, which were not as clear to the public before,” he stated.
The President noted that during Tuesday’s ministerial conference, it was decided to keep the tax in place in light of the situation with the private school system and tax compliance, something which Finance Minister Winston Jordan made a presentation on.
“The Cabinet examined the problem (Tuesday); the issue as you know, several petitions have been presented and the Minister of Finance will make a statement but there is more in the mortar than the pestle. There are very strong arguments to maintain the tax, and as I said Cabinet examined it, and I urge the Minister of Finance to make a public statement so the issues are better understood,” the Head of State said following the opening of the Department of the Environment in Kingston.
President Granger explained that currently, there are about 57 private schools in the country and only about eight of them are apparently compliant with the relevant tax regulations. This, he noted, means that some 49 of these private institutions are non-compliant.
“As it is now, the tax stays and as I said earlier, there are grounds to ensure better compliance by all private operators with the [Guyana Revenue Authority] GRA’s regulations. Right now we have a high level of non-compliance by some private entities,” he stated.
“Private schools are not all the same and so the Minister of Finance is in a better position (to explain the situation),” the President asserted while recognising the additional burden families will be faced with in light of the tax imposition.
Since the announcement of VAT on school fees, stakeholders have come out condemning the move with many parents crying out against the additional burden placed on them. In fact, persons took outside the Guyana Revenue Authority (GRA) Office on Camp Street calling for the removal of the 14 per cent tax on private education.
Organiser of the protest, businessman Roshan Khan stated that while expecting a larger crowd, he was not fazed by the comparatively low turnout. Khan demanded that the Government immediately reverse the VAT charge on education and issue an apology to the country. Other persons on the picket line also had similar cries and called on the Administration to act swiftly to reverse the measures.
“The protest is to save the youths who may be thinking of migrating. If they want to go to private school – nursery, kindergarten, anything that has to do with private education, (the imposition of VAT) is ludicrous… People send their children to private school not (necessarily) because they are rich. It is unfortunate that the leadership thinks that those people who go to private schools, their families are rich,” Khan stated.
Meanwhile, John Edghill, a young student, was also present on the protest line and explained that as a private school student who was working in order to offset the expenses of his studies, the VAT on education was a worrying burden.
“It is an additional burden on me. I don’t make a lot of money. I’m at an entry-level job. I’m helping to pay for my education. Adding 14 per cent will just increase the burden on me. I still have other things to do with money, every day. There is VAT on a whole lot of other (items) now,” he posited.
In defending Government’s imposition of the 14 per cent VAT, Minister Jordan in a letter to the media last week pointed out that the private schools are in a position to absorb the tax and not pass it on to parents.