The hullaballoo over VAT on tuition fees

Mar 05, 2017 Features / Columnists, My Column

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Columnist Freddie Kissoon constantly says that Guyana is a land of misguided people who seem unable to comprehend what is good for them and what is needed. I do not always agree with him, but there are times when I must concur. Yet he himself goes off at a tangent to his argument—in fact, an about turn would be more accurate.
At issue here is the application of the value added tax on the tuition fees demanded by private schools. There are more than 60 known private schools in the country, but only eight have registered for taxes. The reality is that taxes are paid by anyone or any institution that makes money. If the organization is a not-for-profit organisation like the churches and some non-governmental organizations, then it is exempt from taxes.
But in keeping with the tax laws that are common to every country, that organization must file with the income tax agencies. However, either because of ignorance or because of any other reason best known to the people who manage these organisations, some simply do not file.
Guyana is a place where tax-dodging is rampant; people simply avoid paying. The public servant is not so lucky, because his taxes are deducted even before he is paid. Business places, however, always seek to avoid paying, largely by dealing in cash transactions. This is why many of them insist on cash transactions, although that makes them ready targets for criminals. Some of them lose more money than they would have paid in taxes.
Some lowly public servants pay more taxes that many big businessmen, including lawyers and doctors in private practice. This is Guyana. But let any government try to correct this situation and that government would attract condemnation of the worst order.
Some of the private schools are in the business for the money. They are helped by parents who cannot find the time to supervise the children. Many go to great lengths to find the fee, but they do not take the time to see if the education return is equivalent to what they pay.
People say that the public schools are hopeless; that they do not produce academically qualified people. Yet the last time I checked, the public schools have been topping the country at the external examinations. I also realized that many people pay good money at the lower level for the children to qualify for the public schools like Queen’s College and The Bishops’ High School.
The argument, here, is that the children go to private lessons but the school gets the credit. This may be true but again, I know of high performing children who do not go to private lessons.
Nothing is said about those children who go to the private schools and do not even qualify for the better public schools. Many believe that when they pay their children are guaranteed an education, but this is often not the case. A good child would perform excellently under any condition.
No one speaks about those parents who pay for private schooling then pay for private lessons. This must be an indictment on the private school, but no one mentions these things. The contention is that if I pay then my child is going to be academically qualified.
Back in the 1950s and 1960s there were private schools – among them Tutorial High, Central High, Cambridge Academy, BG Education Trust, Indian Education Trust College and many others. Yet the best children came from the public schools. Parents sent their children to these private schools because they were not good enough for the public schools on offer.
The situation is pretty much the same today, except for some of the high flying private schools, but people need to check the results at the external examinations. They would be sorely disappointed and as a former teacher, I know. I also know teachers in the public schools who are asked to help some of the children attending private schools.
There is a shortage of certain teachers in the education system and the private schools are not exempt from such shortages. I wonder how many parents got a refund when the school failed to offer certain subjects that were supposed to be on offer.
Those schools that are not-for-profit organisations, having paid the VAT, can seek a refund and some of them will. But will they pass on the refund to the parents who paid it in the first place? I am willing to bet that this will not be the case. And these schools will not absorb the VAT, choosing instead to pass it on to the parents.
Education is big business for an enterprising few. The children feature very little in the scheme of things. Private schools have been around for more than two decades, but one would be hard pressed to find top performers in the world of work who came through the private school system. The aim of education is to prepare the child for work-life.
But there is this hue and cry about the government taxing education. Reason has fled to parts unknown. We are no longer rational. We do not examine the reality. All we have done is stop at the point that people are paying for education. We also say that the public schools are non-performing, so the private schools are offering salvation.
I remember top performers coming from the Essequibo Coast having attended a public school. It was the same with some children from West Demerara and the many from Berbice.
I also must ask about the source of the teachers for the private schools. When last I checked these were teachers from the public schools that are so bad to the point of being hopeless. Many of them are retired, but the others are people who were trained for the public school system but who have moved on because of the promise of better pay.
Many of these teachers are considered contract workers, and therefore their National Insurance Scheme contributions are not paid, so they would feel the pain down the road. Yet I say that is a matter for the school.
But I must return to the scheme of the taxes. The private schools use the services for which I pay. They use the roads and bridges and playgrounds. There is objection to the contention that people send their children to private schools because they can pay. That is a fact. In the society we have, people with money to burn and as I said, many of them in their private lives, do not pay taxes. Surely they can pay the VAT if the school chooses to pass it on to them.
And for those who say that they are being asked to pay for the recalcitrant, that is true. The problem is that the recalcitrant are the very people you support.

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