Petition against 14% VAT on education engaging Cabinet’s attention

CABINET Secretary and Minister of State Joseph Harmon on Friday said the petition against the implementation of Value Added Tax (VAT) on education is engaging the attention of Cabinet.
As of February 1, 2017, Private education institutions are required to pay a 14 per cent VAT as a result of the removal of zero-rated items in the 2017 budget.

Responding to questions posed by the media during a post-cabinet press briefing at the Ministry of the Presidency, Harmon said he is in receipt of several letters from private institutions all of which he has acknowledged.
“The matter is engaging our attention,” he said noting that Finance Minister Winston Jordan made note of the fact that some private schools are “Charter Schools” and as a result do not pay taxes. The Cabinet Secretary said Minister Jordan will issue a statement on the matter.

“He basically will lay the case on the table,” noting that many institutions may cite withdrawal of students from their institutions because of the implementation of the measures. He said he does not have any figures to show that there has been a decline in numbers at private institutions as a result of the 14 per cent tax implementation.
“I do not have the figures, I cannot comment beyond that, but what I can say in fact, it did attract the attention of Cabinet and Minister (Winston) Jordan will come out with a statement on the matter soon.”

There has been a public outcry on the implementation of VAT on education but the Finance Minister appears unmoved by the public disagreement noting that if parents can afford to enroll their children at private institutions then they can well afford to pay a 14 per cent tax on the tuition.
In an interview in another section of the media recently, the Finance Minister was quoted as saying, “While the earnings from VAT can be used to address social ills; it is a fiscal tool. Our Education Act says that we want to make sure people are not denied education and educational opportunities in Guyana. There is a wide range of education opportunities provided at both the state level and at the private level, the choice is always at the user to determine whether to use public or private.”

Jordan said too that “VAT is not a cure for social ills; it is first and foremost a fiscal tool. I said we are aiming to reduce VAT but in doing so we will seek to broaden the base as wide as possible. There is no VAT on public education; it remains a choice of the parent. Government is not making that choice for them.”
Recently, Director of School of the Nation, one of many private education institutions, Dr Brian O’Toole, began a petition against the implementation of the tax. O’Toole in a letter to the editor warned that the move by the APNU+AFC administration can cause hardship to those who are already disadvantaged and are attending his institution.

“For those who come to Nations daily in luxury cars this new additional tax is an annoyance but to the 16-year-old school leavers who are part of the 800+ ABE cohort, some of whom pay the fees in $100 bills, this new imposition may simply mean they stop the course, stay home and lose hope, and add to the growing numbers of the unemployed and unemployable,” O’Toole said in his missive.

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