Anger as tax on private university education agreed

A government decision to charge 7.5% Value Added Tax or VAT on private universities, medical and engineering colleges has sparked anger among students who say it will hit middle and lower income families and curb the basic right to education.

The budget for the next fiscal year was passed by the Bangladesh parliament on Tuesday with a provision of 7.5% VAT on tuition fees of private universities and private medical colleges.

Earlier in June in his budget speech, Bangladesh’s Finance Minister Abul Maal Abdul Muhith proposed a 10% VAT levy. However, Prime Minister Sheikh Hasina requested the minister to reduce the percentage of VAT in her speech in parliament on Monday.

However, the move to impose VAT was criticised by some opposition and ruling party leaders who called for the withdrawal of the proposal during the parliamentary debate. The reduction from a proposed 10% levy to 7.5% was seen as an inadequate concession.

Students said that they would continue protests sparked by Muhith’s proposal in early June until the full withdrawal of VAT. Several hundred students gathered in front of the parliament building this week while lawmakers were discussing the budget. At least five students were injured as police allegedly attacked the demonstration. Police also arrested four students during the protests, releasing them after an hour.

“Although VAT at a truncated rate of 7.5% is currently levied on English medium schools; private universities, private medical colleges and private engineering colleges are still beyond the boundary of the VAT net,” Muhith said during his 4 June budget speech in parliament.

Soon after, students and others began campaigning against the proposal saying the cost of education would certainly increase.

Protests

On 22 June, law enforcement authorities foiled a procession of private university students heading for the finance ministry building to press home their demands.

Students under the banner Beshorkari Bishwabiddaloy Shikkha Adhikar Andolon – private education rights movement – formed a human chain in front of the National Press Club before the march.

The student wing of the largest opposition party, Jatiyatabadi Chhatra Dal, and the student wing of the largest Islamist party, Bangladesh Islami Chhatra Shibir, issued a statement demanding the withdrawal of VAT, while leftist student wing Bangladesh Chhatra Union staged a sit-in.

“It is a perception among our policy-makers that only children from high-income groups study at private universities. But there are many students at private universities from middle- and low-income groups and some of them bear their expenses by doing private tutoring or other part-time jobs,” said Humayan Rashid, a student of private East West University in Dhaka.

Education at public universities is almost free but seats are limited at these universities so a large number of students enrol in private universities. Political unrest at many public universities leading to classes being postponed is another reason for the growth in private institutions.

Bangladesh has 34 public universities while there are 85 private universities, and around 64 private medical colleges, educating some 450,000 students according to University Grants Commission statistics.

While speaking on the proposed budget on 16 June, State Minister for Finance MA Mannan said: “It is not a tax on education. It is a tax on certain kinds of educational services... We have made a huge investment in education and we want to invest more.

“You choose your lifestyle and you will have to pay taxes,” the minister said.

But protesters said many private universities were non-profit making institutions and should not be taxed.

A similar move to impose 4.5% VAT on private university education was halted in 2010 after angry demonstrations.