AFC wants govt to set up task force on VAT on school fees; promises to lobby for tax removal

Last Updated on Sunday, 30 April 2017, 20:11 by Denis Chabrol

Parents, teachers and students of several private schools picketing the Ministry of Education recently.

The Alliance For Change (AFC) says the 14 percent Value Added Tax (VAT) is necessary to help bridge a huge deficit in the 2017 National Budget, but promises to lobby for its removal next year.

The AFC wants government to set up a body ahead of next year’s budget to discuss the issue

“The status of private educational institutions requires review and updating where appropriate and calls on the Government of Guyana to set up a task force to engage this matter in advance of the presentation of the Budget 2018 estimates,” the party said.

The decision was taken by that party’s National Executive Committee (NEC) held on April 29 in Linden.

“The party therefore declares that it will make strident representation within the Coalition Government that it not continue with this particular tax measure in 2018,” the party said in its Linden Declaration. This announcememt does not appear to be entirely new since Prime Minister Moses Nagamootoo has already virtually ruled out the scrapping of VAT on education but has signaled that it would be addressed in the 2018 National Budget.

The AFC acknowledged that the tax on education is “unpopular” but “necessary” and that Guyanese should have been properly consulted.

“unpopular tax measures are sometimes necessary to meet revenue targets…in retrospect the measure ought to have benefitted from wider consultation,” the AFC said.

Referring to difficulties by the APNU+AFC coalition-led administration in raising revenue to meet its current and capital expenditures and a GYD $10 billion loss due to the reduction in Value Added Tax from 16 percent to 14 percent, the coalition said after an extensive review and deliberations, it acknowledges that “education is a social good and, in ideal circumstances, tuition ought not to attract VAT” and that “Budget 2017 has a significant deficit.”

“The party recognizes that the measure of instituting Value Added Tax on private education tuition has been unpopular and has created some unexpected challenges for some parents of children and adult students attending private educational institutions,” said the party.

Several private educational institutions have resorted to picketing exercises to pressure government into abolishing the tax in education.