Private education VAT

President David Granger, as we have noted in these columns before, appears to prefer to give his ministers free reign to fully manage their own ministries, and he himself has said on occasion that he does not “micro-manage”, with reference to the affairs at City Hall and also with respect to the operations of the Guyana Police Force.

Recently, certain online reports said that the President was set to announce the removal of VAT from private school fees, but when the President later emerged to field questions from the press on the matter, he appeared to have been convinced by Minister Jordan that VAT should remain on private school fees. This was following a recent reconsideration of the matter.

Declining to speak too extensively on the issue, President Granger spoke about the fact that out of 57 private schools only 8 were “tax compliant,” and stated further that “…There are very strong arguments to maintain the tax. I said Cabinet examined it and I will urge the Minister of Finance to make a public statement so that the issues are better understood.”

It doesn’t seem so long ago that the President was exhorting his ministers, in December 2015, to listen to the people and to work in their interest, saying, as reported in the “We have to meet them; we have to find out what their needs are, particularly now at this time of year when, a month from now, we will present our second Budget. That Budget has to be reflective of the needs of our people for development. That can only be truly reflective if there is a process of consultation with the people…”

The minister in question, Mr Winston Jordan, has indeed heard from the people in this matter; there is an ongoing petition by affected schools which has exceeded 14,000 signatures. Unfortunately, however, he has seemingly doubled down on his decision to implement the VAT on private school fees and has been able to convince the President that to remove the tax would have adverse implications.

He has also hastened to rebut any claims of an apparent correlation between the imposition of the VAT and the non-compliant taxation status of the majority of private schools saying, “I do not want a link seen between the imposition of the 14% on private tuition and the recalcitrance of schools, as it relates to paying or filing the income tax. The context