Unanswered questions remain on VAT on private education

- School of the Nations director

In the face of Cabinet’s decision not to repeal the application of Value Added Tax (VAT) on private education fees for the current year, Director of the School of the Nations Brian O’Toole says too many unanswered questions still need to be answered, including what was the purpose of the recent consultation held with stakeholders on the issue.

A large public “consultation” was held at the Cultural Centre just over a week ago, when ministers engaged operators of private schools as well as parents and students, among other affected persons.

Education Minister Dr Rupert Roopnaraine subsequently said that based on a Cabinet review that was conducted after the consultation, the application of VAT would remain for the current year, while it would be re-examined during the preparation of next year’s budget. During the consultation, Prime Minister Moses Nagamootoo had stated that the government would not withdraw the tax this year.

“If such a decision had already been made what was the purpose of the meeting?  Would such unilateral action have been successful prior to elections? Why can it be thought to be acceptable now?” O’Toole asked in a statement that was issued yesterday. “In conclusion, where does that leave us? By abandoning any decision for almost a year the government has succeeded in exhausting and frustrating thousands of persons. A significant number of the youth of this country, already disenchanted by politics are now totally disillusioned.

They look for their leaders and can’t find them,” he added.

Other queries raised related to a petition started by students at his school, titled “Education is a Necessity, Let it be VAT free,” and which O’Toole said was signed by more than 15,000 persons. Stabroek News had been told by the students on the day of its submission to various ministries that it was a little more than 14,000.

Private education became subject to VAT on February 1 as a measure of the 2017 national budget and the petition was delivered to the Ministry of the Presidency, the Ministry of Finance and the Ministry of Education on February 24 after being circulated for over two weeks.

O’Toole and the student council which submitted the petition have said that they had received no response and as a result he questioned how a coalition government, with a majority of one, could ignore a petition signed by more than 15,000 persons. “How can it be accepted that such a statement by more than 2% of the population, and a significantly higher percentage of the ‘voting’ population, can be totally ignored?” he asked.

He also asked if the huge unpopularity of the measure is worth its contributions to the government coffers, while questioning the claim that many private schools are not paying their taxes.

“If the defaulters paid what they should, there would be no need for extra burdens on those who are already paying significant sums in taxes.

Why is it seemingly so difficult for a government with all its powers to resolve such a flagrant injustice?” he questioned before calling on government to explain the process by which several schools have been granted tax-free status as “religious schools.”

According to O’Toole, he has interviewed several individuals, including accountant Christopher Ram, who has said that “the laws are very strict on tax exemptions and government needs to explain the law under which either they or their predecessor made some schools exempt from income tax. The same is true of UG.”

Ram has repeatedly claimed that the VAT Act would make the University of Guyana (UG) tuition subject to the recently instituted measure and has challenged the Guyana Revenue Authority and Ministry of Finance to identify the provision in the law which makes the university and other state-affiliated tertiary education facility exempt from the provision.

GRA Commissioner-General Godfrey Statia, in response to this query, has said only that these schools are exempt because they either have a high or total dependence on government subvention.