VAT on pvt univ to veer off edn target
Al Mamun Harun Ur Rashid :
Concerned stakeholders of private universities have expressed their concern over the government’s decision to impose a 15% VAT on private universities and private medical colleges.
They believe that this decision will ultimately result in an increase in the cost of education for students.
According to the stakeholders, the tuition fees for students will be raised as universities will be required to add VAT to the students’ fees at the tertiary level of education.
Last month, the Appellate Division of the Supreme Court directed the enforcement of VAT on private educational institutions, including private universities and private medical colleges.
Meanwhile, authorities from some private universities have informed that their transaction accounts have been frozen by the National Board of Revenue (NBR).
As a result, they are currently unable to provide salaries for the teachers and staff.
Many have questioned the NBR’s decision to freeze their accounts, especially considering that the case regarding the imposition of a 15% VAT is still under sub judice.
Furthermore, the authorities of private universities have stated that they have not yet received the full verdict from the Appellate Division regarding the implementation and collection of VAT.
They have also pointed out that the practice of imposing VAT is not common in South Asian countries or elsewhere in the world.
Some university officials have asserted that the establishment of private universities was aimed to curb the outflow of currency resulting from students pursuing higher education abroad and to mitigate the incidents of brain drain.
They further fear that if the cost of education increases at the tertiary level, more students will pursue higher education in foreign countries, including South Asian countries, and some may even drop out altogether.
To combat this, some universities have already reduced their tuition fees in order to make higher education more accessible.
The officials also express concern that if tuition fees increase, private universities will lose students.
However, if the university authorities do not increase fees, their income will decrease, making it difficult to sustain the institutions.
Vice-Chancellor of North South University, Prof Atiqul Islam, explains the challenge his university is facing due to the imposition of the VAT,”We are not clear on how the VAT will be implemented. Our bank accounts have been frozen by the NBR.
We are currently struggling to pay salaries for our teachers and staff. It has put us in an awkward situation.”
When asked about the impact of the VAT on tuition fees, Prof Atiqul Islam says, “According to the law, private universities are not meant to make a profit.
However, implementing a 15 percent VAT across the board would be challenging, as not all institutions would be able to absorb the additional costs. Consequently, an increase in tuition fees would likely be necessary.”
He adds that if tuition fees increase due to the VAT, education in private universities would become more expensive and many students would choose to study abroad instead.
Prof Atiqul Islam also shares his experience in other countries, stating, “I have not seen any VAT imposition on higher education, even in Australia. Now students will have to pay taxes to study, which is ludicrous.”
According to North South University, a BBA student needs to pay Tk 7,80,000 for 120 credits.
This does not include additional fees for laboratories. If the VAT is applied to students’ tuition fees, it may become difficult for many to afford these expenses.
In contrast, the North Bengal International University in Rajshahi charges Tk 3,52,000 for the same BBA course.
The Vice-Chancellor of the university, Prof Dr. Bidhan Chandra Das, said, “They have already reduced tuition fees by 40 percent for all semesters, taking into consideration the financial situation of their students.
However, increased tuition fees would still burden students from middle-income families.”
It’s important to note that the earnings of private universities can vary, depending on their location and other factors.
He further said, “It will be difficult to run universities when their income is meager. Since we don’t have the full verdict yet, it is difficult to predict how the VAT will be collected.”
According to Provision 42 of the Private University Act, 2010, each private university must inform the University Grants Commission (UGC) about their student fee structure.
This structure should be designed based on the country’s socio-economic conditions to cover necessary expenses. If necessary, the commission can provide advice.
Regarding tuition fees, Md Omar Faruque, the Director of UGC Private University Division, said, “When setting tuition fees, we must consider the socio-economic conditions.
Additionally, poor students and descendants of freedom fighters receive a three percent tuition fee waiver.”
Furthermore, private university authorities who wished to remain anonymous revealed that the government is currently striving to increase revenue from various sectors.
Private universities are a significant target, but it is crucial to balance revenue generation with ensuring access to quality education, particularly for students from diverse socio-economic backgrounds.
They emphasized that whatever decision the government makes, it should not negatively impact the interests of the students or educational institutions.
