UG tuition not subject to VAT - Statia

Tuition for the University of Guyana (UG) is not subject to Value Added Tax (VAT) neither is the tuition for the Government Technical Institute, Cyril Potter College of Education or any other Government Education Institution. This is according to Commissioner General of the Guyana Revenue Authority (GRA) Godfrey Statia.

Statia was asked by Stabroek News to respond to a query raised in a letter published in yesterday’s edition of the newspaper. The letter published under the headline “VAT and education services” asked Government to explain how it intends to minimise the impact of VAT on the students of UG.

The author noted that the previous version of Schedule I to the Value-Added Tax Act zero-rated “a supply of education services and educational materials” and defined education services as education and hostel facilities for students and scholars provided by: (a) a pre-primary, primary, or secondary school; (b) a technical college, community college, or university; or (c) an educational institution established for the promotion of adult education, vocational training, technical education, or the education or training of physically or mentally handicapped persons.”

The author further noted that the definition which made it clear that education services provided by all schools, colleges and universities would have no VAT applied had been removed along with the zero-rating provisions.

“Primary and secondary schools are free and therefore VAT on zero should still be zero but what about the University of Guyana where a fee is payable?” the writer asks?

They go on to identify two possible paragraphs in the Exempt list (Schedule II) that could be used to explain the application of the act to UG and other tertiary institution.

These are paragraph (e) which states that a supply of any goods or services by the State, a local authority, or a charity where the consideration for the goods or services is nominal in amount or not intended to recover the cost of such goods or services and paragraph (f) which provides for a supply of all goods and services by budget agencies named in the schedule to the Fiscal Management and Accountability Act and by state agencies that perform regulatory functions by statute.

The writer however noted that UG collects over a billion dollars annually in fees which is surely not nominal and is intended to recover the cost of the services and that the University is not listed as a budget agency in the schedule to the Fiscal Management and Accountability Act and does not perform regulatory functions. These two realities it is argued negate both provisions.

Asked to explain under which provisions these entities remain VAT exempt, Statia noted that a press statement with clarification would be issued either today or tomorrow so that any confusion will be resolved.