Standoff over pvt varsities' income tax

FE Team | Published: May 24, 2024 20:46:56

Ever since private universities have started mushrooming, they have been making news - often for wrong reasons. That they receive media attention is primarily because a good number of them face multifarious problems, some concerning financial and others management issues. Some private universities are reportedly running without vice-chancellors and qualified teachers. The quality of education imparted by private varsities, barring a few, leaves much to be desired. Besides, sponsors having political connections have managed to secure permission to open some of these seats of higher learning with the sole objective of making money. The University Grants Commission, the regulator for universities, has also proved itself to be an ineffective institution to deal with higher education issues.
Against such a backdrop, the private varsities got entangled in a major dispute with the National Board of Revenue (NBR) involving payment of income tax at 15 per cent per annum. The NBR levied the income tax on private universities that usually charge a hefty tuition and other fees on their students during admission and at the start of every semester. The dispute over tax payment was placed before the High Court for hearing and the apex court on February 27 this year delivered its verdict in favour of the NBR, paving the way for realisation of the said tax. A review appeal has also gone in favour of the NBR. Some universities have complied with the court order but a few have defaulted. The unpaid arrear taxes now stand at about Tk 4.0 billion and the NBR reportedly had set a deadline for payment of dues on March 1, 2024. Following the failure to meet that deadline, the NBR has frozen the bank accounts of some universities. A few of them, allegedly, have been found running their academic activities, including payment of salaries of teachers and other financial obligations. This has raised suspicion that the educational entities in question have maintained accounts beyond what is shown officially. If that is the case, it goes against the Private Universities Act 2010.
Whatever the case may be, the majority of the universities' failure to clear their dues to the income tax authority raises more questions than it answers. Some top executives of the universities have questioned the very justification of imposing income taxes as they are non-profit bodies under the relevant law. However, the tax people won't see eye to eye with them as the apex court has resolved the issue. Undeniably, an undesirable situation has arisen in one of the country's education sectors that provides the opportunity for higher education to students who could not be accommodated by the public universities.
While the prospect of turning education into a commodity has to be avoided at all costs, the existing varsities should be allowed to continue with their academic activities. Any errant entity, even if it is engaged in the noble act of disseminating knowledge, deserves punishment under the law. It is also advisable that enforcers of law, tax officials, in this case, use their discretion while dealing with educational institutions. Most importantly, winning a court case is not the be-all and end-all of the matter. So, it would be advisable to listen to what financial and/or procedural limitations the varsities are facing and sort out the tax issues amicably.