Should there be value-added tax on education? This is the talk of the country in Bangladesh these days. On Thursday, September 10, 2015, agitating students of private universities staged rallies across the capital Dhaka, protesting the police action on an earlier student demonstration in Rampura. Following the protest rallies on Thursday, a huge traffic jam was created across the capital and several other cities in the country, triggering untold troubles for the commuters.
On September 9, hundreds of university students blocked the capital’s Badda Link Road near Aftabnagar, demanding the withdrawal of the 7.5 percent value-added tax (VAT) imposed on private university tuition fees. Twenty three students and a deputy registrar of East West University were injured when the police opened fire and used charged truncheons.
The government initially proposed a 10 percent VAT on private universities in the budget plan for 2015-16. The students immediately protested, and in July the VAT was reduced to 7.5 percent upon the request of Prime Minister Sheikh Hasina. Since then, students of private universities have kept up their protest activities and came up with the slogan “No VAT on Education,” which has gained momentum and even turned into a hashtag on social media.
According to the University Grants Commission of Bangladesh, the regulatory and granting authority to public sector universities, currently there are 84 private universities in the country. The number of students enrolled in private schools is 314,640.
Generally, the cost of tuition in private universities is significantly higher than in public schools. Students pay roughly around BDT 700,000 ($9,000) for a four-year degree and diploma from a private university. The fee for students of private medical schools is almost twice the amount, hovering around BDT 1,400,000 ($18,000). The VAT on such fees can reach around BDT 52,500 ($675), which is roughly equal to an average fee for one trimester. The new tax levied would be an additional burden to the students and their families’ education expenses.
The students were also angered by some statements from the country’s finance minister Abul Mal Abdul Muhith, who argued in favor of imposing the VAT. According to him, every student spends on average around TK 1000 per day, and the tax would only be TK 75 of that for them. But Nazia Manzoor, a teacher from East West University of Bangladesh, argued on her Facebook page that not all students of private universities came from rich families:
I have students who struggle to pay the tuition fee—after giving tuitions, working two jobs and working the graveyard shift at call centers. I have had kids beg me or another faculty member for that A because without it they’d miss that scholarship and will just not be able to continue their education. I have seen kids walk around the corridors of our office rooms with an application in hand asking for financial assistance from us. Kids drop out. Often enough. The university doesn’t officially allow students to sit for exams unless they’ve paid their dues.
In the face of mass student protests, the National Board of Revenue (NBR) issued a press release, where they stressed that it would not be the students, but the private universities who would pay the 7.5 percent VAT imposed on the tuition fees, and that the universities would not raise the fee to compensate for additional expenses.
According to the latest reports, the students of private universities have announced a three-day general strike at all private campuses across the country, demanding to withdraw the VAT. Students have also called upon the University Grants Commission to formulate a timely and student-friendly policy on tuition fees immediately to end the prevailing crisis. The Association of Private Universities of Bangladesh (APUB) has also called upon the government to review its decision to impose VAT on the universities.
In 2010, the government had already attempted to impose a 4.5 percent value-added tax on private universities in Bangladesh, but was forced to withdraw the decision in the face of severe student unrest and mass protests.
Source: Dhaka Tribune
