The 14% VAT on private education will remain in place for the time being, President David Granger said yesterday, while stating that only eight out of 57 local private institutions are tax compliant, a situation which government is looking to correct.
“As it is now, the tax stays and as I said earlier there are grounds for ensuring that there is better compliance by all private operators with the GRA’s (Guyana Revenue Authority’s) regulations. Right now we have a high level of non-compliance by some private entities,” Granger told the media when approached shortly after the Department of Environment was launched.
This issue has created quite a buzz since its implementation on February 1, following the removal of zero-rated items, a measure of the 2017 Budget. There have since been several calls for its removal.
Earlier this week Newsourcegy.com reported that Granger would be announcing the removal of this tax. Asked about this yesterday, he said that the “problem” was examined by Cabinet on Tuesday and he used the opportunity to remind all that it had attracted a petition. The online petition started by the students of the School of the Nations’ Sixth Form College got 14,000 signatures and these were distributed to various government ministries last Friday.
Noting that Minister of Finance Winston Jordan will speak on the matter, Granger said “…There are very strong arguments to maintain the tax. I said Cabinet examined it and I will urge the Minister of Finance to make a public statement so that the issues are better understood.”
He said there are about 57 private schools in Guyana out of which “eight seem to be what you call tax compliant, which means that about 49 are not compliant, so …the private schools are not all the same.”
Granger said Jordan was in a better position to address the matter and therefore he did not want to deal with it any further. “There is obviously tremendous sympathy for the families and for the students but as I said other things will be explained by the Finance Minister when he makes his statement.”
He said that while the government was not looking to put pressure on private entities, there was need to ensure that “all Guyanese pay their fair share”.
Told that parents feel the pressure was being put on them and not the private schools, Granger simply reiterated that the minister will make a statement on the issue.
Asked what caused him to change his mind between Monday and now, Granger said, “My mind is not changed.”
He reminded that he previously said there was a full Cabinet meeting on Tuesday and the Finance Minister explained certain aspects of taxation, which “were not perhaps clear to the public before so Cabinet is now in a better position and I have asked that the Minister of Finance inform the public about the issues which arose at Cabinet.”
Stabroek News understands that at last Tuesday’s Cabinet’s meeting, armed with a dossier on tax and other facts pertaining to private schools in the country, Jordan had laid out his arguments as to why it was not feasible to have private education exempted from the VAT charge.
According to sources, he explained that more than 50 per cent of the private schools in this country were not registered. Of those registered, only quarter were tax compliant and those were not the “popular private schools.”
One private school, which has classes from playgroup to high school, currently owes government over $180 million in outstanding taxes.
At another city private school, the owner and director claimed that she works for only $80,000 per month and that the school was not turning a profit.
It was found also that teachers at some of the private schools were still indebted to government for higher education training contracts they signed while working in the public system, but left soon after their graduation.
As it pertains to the teachers who still owe government, the Ministry of Education has been called upon to identify them and pursue recovering the sums owed.
Two separately organized protests in front of the Ministry of Finance (MoF) and the GRA on Tuesday saw protestors questioning the concept of the “good life” that has continuously been promised by the Government of Guyana in light of recent VAT measures including those on education and utilities.
Filmmaker Kojo McPherson, father of two children, expressed deep concern at the notion of taxing private education, while stating that parents would often sacrifice to get the best for their children.
McPherson opined that if the government’s position was that public schools were available as an alternative to the private system, there was need for investment in the public school system so that students can actually be absorbed and their needs effectively catered to.
“It’s not easy to send your children to private school but this is something we do for our children and to be punished for that, it doesn’t make sense. I think the ministers’ comments were just callous and that’s the reason I’m out here,” McPherson said. He was referring to statements attributed to Jordan to the effect that parents have a choice when it comes to education; that is public institutions or private institutions.
“There is no VAT on public education, it remains a choice of the parent. Government is not making that choice for them,” he had said, while describing VAT as a “fiscal tool” which is “not a cure for social ills.”
