VAT will murder private education

Apr 05, 2017 Features / Columnists, Peeping Tom

The taxes placed on private education will kill it. The tuition fees are already a heavy burden on parents. When you add a 14% VAT to those fees, it will hurt the pockets of parents.
There is a mistaken belief out there that those who send their children to private schools are rich people and can more than afford to pay the increase. The majority of students who go to private schools cannot be considered rich.
Pass by Green Acres in the morning or at dismissal time and check for yourself if the majority of those who attend that school can be considered rich. Pass by the Swami school and you will find that it is not a ‘rich-persons’ school.
The majority of students in private schools come from upper lower income, lower middle income and middle income families. These parents are making tremendous sacrifices to send their children to private schools.
Parents are borrowing from the banks to pay school fees. This means that they have to pay interest, which increases their costs by at least 8-10%. Now, when the government is going to add an additional 14% on that it means that the overall costs to parents can increase by as much as 25%. This is too much for poor parents to bear.
The government is having afterthoughts about the VAT. But it should never have thought about it in the first place, because the government came to power by appealing to the sympathies of those whom it claimed were being made poor under the PPPC.
Private education should not be taxed. Guyana had a long history of state education. The private schools were put out of business by the government, even though before then many of them were state-assisted schools.
There was never any ban on private education, but people knew that under Burnham, he would have shut you down if you attempted to open a private school. When Hoyte came in, it was a relative of his that made the first move to open a private school. There was no objection. This is how private education was restored. There was never any policy of liberalization. There was never an official policy which sought to implement measures to encourage private education. There were just prosaicisms which were thrown around about its value.
Private education is now maturing. It never had any infant support. Private schools need support, not VAT.
A growing middle class emerged under the PPPC. A larger middle lower income class also developed. Many of them want better for their children. Which Minister of the government does not want this too?
Private education should be given a tax shelter. Instead of tax on private education, there should be a subvention paid to every parent equivalent to 10% of what it costs to educate a child in a private school.
Private education does not enjoy tax concessions. The not-for-profit organizations do not have to pay taxes, but this is because they are tax exempt. They are not into education for profits. They are providing a social service. But what concessions are enjoyed by private schools outside of the not-for-profit? There is no incentive scheme for private education.
The tourism, agricultural, forestry, mining and manufacturing sectors have been generously lavished with government fiscal concessions. The aviation sector has also benefitted. Public transportation has benefitted from reduced taxes on mini buses. But private education has not had concessions.
It is time for private education to be given a break so that it can develop in a manner in which even lower income parents would be able to afford to send their children to private school.

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