Finance Minister AMA Muhith clarified on Tuesday his stance on collection of income tax from private universities amid protests by students and a decision taken by his cabinet colleagues.
He, however, said the private universities which are making profits must pay income tax.
"The private universities are making profits. They will pay income tax. No VAT will be on students," the minister told newsmen after a cheque handover ceremony organised by Investment Corporation of Bangladesh (ICB) at his secretariat office.
He said once the government had decided to impose VAT on private university students but later did not implement it.
"Usually educational institutions do not pay tax. But they charge (high) amount on students and makes profit (from there)," said Mr Muhith.
Earlier on the day, Prime Minister Sheikh Hasina at a meeting of the Executive Committee of the National Economic Council (ECNEC) made it clear that no VAT will be imposed on private universities. Planning Minister AHM Mustafa Kamal informed newsmen about it after the meeting.
As Mr Muhith on Monday night talked about VAT imposition on private universities, students of various private universities in the capital staged demonstrations protesting the decision. They also took part in the ongoing demonstration being staged by students of other public institutions demanding reform to the quota system in government jobs.
Regarding quota reform, the minister said quota must be there to support disadvantaged section of people.
Many countries have brought reform of the quota system and "we also have to re-examine it".
"To argue against the quota system is wrong," Mr Muhith said, adding that the public administration ministry will start the reform work soon while the ministry of finance will join it after the budget for the next fiscal year is passed.
He said decision has already been taken to fill posts, remained vacant under quota, with meritorious candidates outside the quota.
Mr Muhith said every year three organisations -- the World Bank, the International Monetary Fund, and the Asian Development Bank -- make lower GDP (gross domestic product) growth estimation but later their estimations are found to be wrong. And they follow government's figure, he said.
The World Bank on Monday estimated that this year the GDP growth of Bangladesh will be around 6.5 per cent.
Mr Muhith said the Planning Commission has estimated a 7.65 per cent gross domestic product (GDP) growth this fiscal year. "But I am sticking to 7.3 per cent. My assumption is that the growth is going to be not less than 7.5 per cent."
While talking about Tk 512 million dividend paid by the ICB to the government, the minister thanked the officials concerned for their role saying that they have done excellent job in bringing stability in the bourses.
He said the stock exchanges of the country can no more be named as 'fatka bazaar' (speculative market) as many reforms have been carried out since the debacle in 2010.
"Ups and downs are normal phenomenon in stock markets. But at present, there is no scope of happening debacle again," the minister said.
Mr Muhith said Bangladesh needs a decent stock market from where money for long-term investment can be collected. The commercial banks become sick by providing long-term loans since those turns bad loans.
He said a stock market like Bombay is necessary for Bangladesh which can give resources for long-term investments.
"I'm foreseeing a good stock market in Bangladesh in the near future from where many people will be able to obtain money," he said.
Mr Muhith also said the ICB and some more state-owned banks are providing fund to scam-ridden Farmers Bank Ltd to save it from sinking. "This government cannot allow the collapse of a bank. We won't let it happen no matter how bad the bank is," he noted.
The minister said the ICB and those state-run banks will get shares of Farmers Bank Ltd and become stakeholders. The bank's future will lie on them.
ICB chairman Prof Dr Mojib Uddin Ahmed and managing director Kazi Sanaul Hoq also spoke on the occasion.
syful-islam@outlook.com