English Medium Schools: VAT proposed despite court ruling against it

Shayla Sultana could not believe her ears when she heard that the much-talked-about uniform VAT rate of 15 percent will be applicable to English medium schools.

The mother of a nursery-going child in the capital thought there would be no more tax burden on them after the Supreme Court had ordered the government not to collect value-added tax (VAT) from English medium students.

But that was not to be since the government in the proposed budget for fiscal 2017-18 did not exempt English medium schools from paying 15 percent VAT.

All other educational institutions are kept beyond the purview of VAT in the budget proposals placed by Finance Minister AMA Muhith in parliament yesterday.  

"How the government slaps VAT again when the highest court of the country ruled against it! I'm flabbergasted," said Shayla, a resident of Indira Road.

On February 13, the apex court ruled that the government should not collect VAT from students of English medium schools.

Several guardians expressed concern that the cost of English medium education would go up further as the tax burden would ultimately fall on them who were already paying huge tuition fees to the schools.

There was a time when children from mainly well-off families studied in English medium schools. But now, many children from middle-class and limited income families attend these schools for quality education and due to a lack of seats in public schools, a number of guardians said while talking to The Daily Star.  

And levying of VAT would badly affect these people who spend their hard-earned money on their children's education, they added.

"The cost of education in these [English medium] schools is already high and imposing tax is nothing but rubbing salt into the wound," said Rahman Munshi whose son is studying in grade-II at Sunnydale School.

Besides the move is discriminatory against English medium students as no VAT has been levied on students of Bangla medium schools, he said.

"Is it an offence that I send my children to an English medium school?”

Lilly Haque, whose child studies in European Standard School in Dhanmondi, said, "The amount [of VAT] may look insignificant to some, but it's a burden on people like us who count every penny when prices of essentials go up."

The government in fiscal 2007-08 imposed 4.5 percent VAT on fees and services of English medium schools. In the budget for fiscal 2014-15, the rate was raised to 7.5 percent striking a blow to many guardians.

In 2010, the government brought private universities under the VAT net (4.5 percent), but had to backtrack following days of student protests.

In the budget of fiscal 2015-16, the government imposed 7.5 percent VAT on tuition fees of private universities and medical colleges but it had to backtrack on this decision too following massive student protests in September 2015.

Following these examples, some guardians of English medium school students staged demonstrations in the capital. Two guardians filed a writ petition seeking VAT exemption.

The National Board of Revenue collected 7.5 percent VAT from English medium schools until the court order this February.

If this year's VAT proposal for the country's 150 registered English medium schools is implemented, guardians of nearly 1.93 lakh students would have to pay double the amount they paid the last time as VAT for their children's education.