Dear Editor,
The previous version of Schedule I to the Value-Added Tax Act zero-rated “a supply of education services and educational materials” and provided definitions for both terms. Education services were defined as follows:
“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.”
It was therefore clear that education services provided by all schools, colleges and universities would have no VAT applied.
The definitions and the zero-rating provisions have now been removed. Statements from government representatives make it clear that VAT will now apply on private schools but have not been so clear about VAT in the public school system. 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? There are only two possible paragraphs in the Exempt list (Schedule II) that would possibly be used; these are as follows:
“(e) 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;
“(f) a supply of all goods and services by budget agencies named in the schedule to the Fiscal Manage-ment and Accountability Act and by state agencies that perform regulatory functions by statute”.
With respect to (e), State is defined in the Act as “Guyana or the Republic of Guyana” and surely cannot be stretched to include all government owned institutions. The entity also collects over a billion dollars annually in fees. Surely this is not nominal and is intended to recover the cost of the services. It is even possible that the fees on some courses and the fees applied to overseas students fully cover the costs incurred.
Since the University of Guyana is not listed as a budget agency in the schedule to the Fiscal Management and Accountability Act and does not perform regulatory functions, we could rule out (f).
How exactly does the government intend to minimise the impact of VAT on the students of the university?
Lastly, how does the above apply to the Cyril Potter College of Educa-tion, the Government Technical Institute, the Guyana School of Agriculture and the Critchlow Labour College?
Yours faithfully,
(Name and address provided)
