The government has proposed to impose 10 per cent VAT on education in private universities and engineering and medical colleges. If, for example, a student pays a total of Tk.700,000 to obtain a Bachelor of Business Administration (BBA) degree from a private university, now onwards he or she has to pay Tk.70,000 more to get the same degree. People of different sectors have already raised questions about the justification of this new VAT. Can we welcome such move of the government?
Let us delve into a vivid case. If we consider North South University (NSU) as an example, then this move would have been justified some 15 years ago when education at NSU was a luxury. In those days, students of North South University (NSU) represented only the rich class - only the wealthy community could think of affording private education at NSU. The scenario has now changed. The composition of students is now vastly heterogeneous with increasing representation from the middle class. The same institution is now attended by students belonging mostly to the middle and upper middle classes. If one collects the demographic information of NSU students, he or she will observe that a significant portion of students belong to middle and upper middle classes. NSU is no longer a place where only the children of rich families study. Now this information seems quite contradictory if we look at the amount students pay to get a BBA from NSU. It costs almost Tk.800,000. One can presume that if a family can afford Tk.800,000.0 as tuition fees, then it should be considered a rich family. However, the reality is different. We have seen a lot of students at NSU whose fathers have deposited some amount of money in banks after selling assets or they pay tuitions of their children out of their pension money.
Another point that should have been taken into consideration, is whether the present generation of students are in a position to pay such fees. Imposition of VAT has added salt to injury.
There are parents who think of education as an investment to build the future of their children. So they send them to highly expensive schools and universities. This move does not suggest that they are rich and can easily pay 10.0 per cent VAT on education. The middle class families who earn just enough to maintain a modest living, send their children these days to NSU. A new phenomenon has developed where the middle class families often reaches an agreement with their children on such terms as they will pay tuition fees for some semesters at private universities and after some semesters, the children themselves will finance their education. We have seen a lot of students studying BBA at NSU entering in this type of agreements with their parents.
Now what the government would say about this? Are the students rich enough to pay 10 per cent VAT?
Unfortunately education has already become a white elephant due to rampant profit motive of a section of owners of private universities. We would rather say that the government is misinformed about the ground reality and that is why a policy like this has been announced. This is what is called the policy of impoverishing people.
The writer is Faculty Member,
 the School of Business, North South University.
 jheco.du@gmail.com
VAT on education
Md Jamal Hossain | Published: June 25, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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