AFC calls for VAT on private education

The Alliance for Change(AFC) is calling on the government to set up a task force to engage the issue of applying Value Added Tax(VAT) on private education in Guyana. This move by the political party is being dubbed the Linden Declaration following the party’s National Executive Conference (NEC) being held in the mining town over the weekend.

According to a statement released by the party sunday, it remains cognizant and understanding of the difficulties faced by the A Partnership for National Unity and Alliance For Change government in raising revenue to meet the national capital and current expenditures for 2017 at a time when there is a difficult economic climate.

The AFC said that it also recognises that the measure of instituting VAT on private education tuition has been an unpopular decision taken by government, which resulted in unexpected challenges for some parents of children and adult students attending private educational institutions. As such, the party said that it has taken into consideration the views expressed by those who have been affected by the measure and having thoroughly reviewed all perspectives and conducted extensive deliberations, it accepts, education is a social good and, in ideal circumstances, tuition ought not to attract VAT that Budget 2017 has a significant deficit, that the reduction of the VAT rate from 16 percent to 14 percent, has resulted in a net revenue loss of GY$10B, that unpopular tax measures are sometimes necessary to meet revenue targets and that in retrospect, the measure ought to have benefitted from wider consultation.

In highlighting these points, the AFC said that it will make strident representation within the Coalition Government that it does not continue with the particular tax measure in 2018.

The decision by government to apply this tax on private education tuition was met with great opposition from concerned stakeholders. On April 7, 2017 Prime Minister, Moses Nagamootoo had said that government is committed to reviewing the tax. However, he could not say if the review will be done for 2017. He made this announcement at a meeting held at the National Cultural Centre with other government officials and concerned parents and students. Minister of Finance, Winston Jordan had maintained that the tax is not unreasonable. At a recent press conference, the Minister had said that there are only 54 private schools registered with the Guyana Revenue Authority (GRA), however there are much more than this in and out of the Georgetown. He revealed that the 54 schools only represent 57 percent of the private schools in Guyana. Of that number, only 20 percent or 11 are recognised by the Ministry of Education. Further, 10 percent of those private schools are registered as non-profit organisations and 14 percent are registered as profit-making entities.

Responding to the opposing views on the imposition of the tax, the Finance Minister said that at the end of the day, Guyana still has a choice. He added that schools can also choose to absorb the VAT and not apply it to the fees currently being charged so as to make the parents of students and adult students pay the 14 percent tax. (Kaieteur News)