Dhaka, Bangladesh (BBN)-Should there be value-added tax on education? This is the talk of the country in Bangladesh these days.
On Thursday, September 10, 2015, agitating students of private universities staged rallies across the capital Dhaka, protesting the police action on an earlier student demonstration in Rampura, reports Globalvoicesonline.org.
Following the protest rallies on Thursday, a huge traffic jam was created across the capital and several other cities in the country, triggering untold troubles for the commuters.
On September 9, hundreds of university students blocked the capital’s Badda Link Road near Aftabnagar, demanding the withdrawal of the 7.5 per cent value-added tax (VAT) imposed on private university tuition fees.
Twenty three students and a deputy registrar of East West University were injured when the police opened fire and used charged truncheons.
The government initially proposed a 10 per cent VAT on private universities in the budget plan for 2015-16.
The students immediately protested, and in July the VAT was reduced to 7.5 percent upon the request of Prime Minister Sheikh Hasina.
Since then, students of private universities have kept up their protest activities and came up with the slogan “No VAT on Education,” which has gained momentum and even turned into a hashtag on social media.
According to the University Grants Commission of Bangladesh, the regulatory and granting authority to public sector universities, currently there are 84 private universities in the country.
The number of students enrolled in private schools is 314,640.
Generally, the cost of tuition in private universities is significantly higher than in public schools.
Students pay roughly around BDT 700,000 ($9,000) for a four-year degree and diploma from a private university.
The fee for students of private medical schools is almost twice the amount, hovering around BDT 1,400,000 ($18,000).
The VAT on such fees can reach around BDT 52,500 ($675), which is roughly equal to an average fee for one trimester.
The new tax levied would be an additional burden to the students and their families’ education expenses.
Nazim Farhan Chowdhury questioned how much money the government would make by imposing VAT on tuition fees of private universities:
“A question to ask is how much actually is the government hoping to earn from this levy? Could we not get that from somewhere else? Like if we stopped pavement beautification work, or not buying fancy SUVs for ministers, or even deciding we rather have a educated nation opposed to a warship”?
Anu Muhammad, a professor of economics from Jahangirnagar University, wrote on Facebook:
“Tuition fees of private universities are too high. But that does not mean that students who are studying in them come from wealthy families.Most are coming from middle and lower middle class families.They resort to private universities because the seats of public universities are limited.Considering the market demand, the number of such universities has increased in recent times. The families of the students have to stretch far to fund the tuition fees by working extra times or selling properties.They do it with the hope that their kids will do better than them in the future and won't have to struggle like them”.
The students were also angered by some statements from the country's finance minister Abul Mal Abdul Muhith, who argued in favor of imposing the VAT.
According to him, every student spends on average around TK 1000 per day, and the tax would only be TK 75 of that for them.
But Nazia Manzoor, a teacher from East West University of Bangladesh, argued on her Facebook page that not all students of private universities came from rich families:
“I have students who struggle to pay the tuition fee—after giving tuitions, working two jobs and working the graveyard shift at call centers. I have had kids beg me or another faculty member for that A because without it they'd miss that scholarship and will just not be able to continue their education. I have seen kids walk around the corridors of our office rooms with an application in hand asking for financial assistance from us. Kids drop out. Often enough. The university doesn't officially allow students to sit for exams unless they've paid their dues. […]”
In the face of mass student protests, the National Board of Revenue (NBR) issued a press release, where they stressed that it would not be the students, but the private universities who would pay the 7.5 percent VAT imposed on the tuition fees, and that the universities would not raise the fee to compensate for additional expenses.
Fahim Mashroor pointed out a controversy in NBR's statement: if VAT should be paid by the university authorities, it would require a change in the current VAT law:
“If someone says that university authorities will pay Value Added Tax (VAT), not the students, they have neither a “theoretical,” nor a “practical” idea about it (Editor's note: A VAT is like a sales tax in that ultimately only the end consumer is taxed – source: Wikipedia). If universities pay any amount of money to the government, it will be tax, not VAT. To do that, you need to change the law (on the status) of private universities—from non-profit to profitable organizations. And if we call it VAT, then it should only be imposed on the students”.
Rajesh Karmakar opposed the imposition of VAT on education. He also questioned the commercial nature of private universities, which he said often find a variety of excuses to earn money:
But still some questions remain (about these protests);
While the university administration increases course fees from 10 to 20 per cent each year, why do we remain silent?
When they cite a variety of excuses to earn money, why do we not block the roads in protest?
For a four-year long course some universities charge BDT 400,000 taka (US$5,000), some university take 1500,000 taka (US$19,000).
Why do we not question such a big gap? It cannot be logical.
According to the latest reports, the students of private universities have announced a three-day general strike at all private campuses across the country, demanding to withdraw the VAT.
Students have also called upon the University Grants Commission to formulate a timely and student-friendly policy on tuition fees immediately to end the prevailing crisis.
The Association of Private Universities of Bangladesh (APUB) has also called upon the government to review its decision to impose VAT on the universities.
BBN/SK/AD