As public outcry grows over the implementation of Value Added Tax (VAT) on private education services, Minister of Finance Winston Jordan maintains that as a fiscal measure VAT should not be looked at as a solution to social ills.
Private education became subject to VAT on February 1, following the removal of zero-rated items, a measure of the 2017 Budget.
An online petition titled “Education is a Necessity, Let it be VAT free” had up to Saturday garnered 1,669 signatures.
The petition which was begun by students at the Nation’s Sixth Form College states in its explanatory note that it is “addressed to the politicians, economists, and strategists who made the decision to impose this levy and to simply ask them to seek some other means to raise revenue.”
It argues that this new measure will not only affect students of private institutions but is an issue “which affects us all in Guyana.”
“The imposition of the 14% VAT on private schools will, of course, impact very heavily on the children and youth attending those [private] schools. For some, the perception is that anyone who attends a private school must be wealthy. That perception may be true for a certain percentage but, for the majority, attendance at such schools often represents a real sacrifice by a family member,” the explanatory notes argues.
The petition follows a letter written by Dr Brian O’Toole, Director of the School of Nations and published in the Thursday edition of the Stabroek News.
In the letter O’Toole argues that making private education subject to VAT would disenfranchise several disadvantaged persons who utilized the service.
He noted that one of the most popular programmes offered at his school is a series of courses from the Association of Business Executives (ABE) from the UK which is being accessed by several school leavers.
He also noted that while some of his students will not be affected by this change others might be forced to withdraw from programmes.
“For those who come to Nations daily in luxury cars this new additional tax is an annoyance but to the 16-year-old school leavers who are part of the 800+ ABE cohort, some of whom pay the fees in $100 bills, this new imposition may simply mean they stop the course, stay home and lose hope, and add to the growing numbers of the unemployed and unemployable,” O’Toole stated.
Jordan however discounted this argument saying that persons always have a choice.
Speaking with Stabroek News in the corridors of Public Buildings on Thursday, he stated, “While the earnings from VAT can be used to address social ills; it is a fiscal tool.
Our Education Act says that we want to make sure people are not denied education and educational opportunities in Guyana. There is a wide range of education opportunities provided at both the state level and at the private level, the choice is always at the user to determine whether to use public or private.”
He reiterated, “VAT is not a cure for social ills; it is first and foremost a fiscal tool. I said we are aiming to reduce VAT but in doing so we will seek to broaden the base as wide as possible. There is no VAT on public education, it remains a choice of the parent. Government is not making that choice for them.”
