NBR withdraws VAT on private universities

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Doulot Akter Mala
The government has withdrawn the Value Added Tax (VAT) levied on private universities from July 01 last.
The National Board of Revenue (NBR) issued a Statutory Regulatory Order (SRO) last Sunday in this connection.
Explaining the reason for withdrawal of the VAT, the SRO said the education expenditures of the private universities would increase manifold, if the government imposed the tax.
It said the students of private universities have to spend a lot of money for their education compared to their counterparts studying in public universities.
"The NBR has waived the VAT as per VAT act, 1991, section 14, effective from July 1," the SRO said.
In the budget for fiscal 2007-08, the finance adviser Mirza Azizul Islam proposed imposition of VAT on the basis of truncated base value of the private universities at the rate of 4.5 percent.
But the proposal faced strong opposition from the private universities out of the fear that imposition of VAT would make education even costlier in private universities.
"The students of the private universities are already deprived of the government's subsidized education offered by the public universities and imposition of VAT might discourage students from higher education," NBR member of VAT Mohamad Alam told the FE Monday.
The government has imposed 4.5 per cent VAT on immigration advisers, specialised doctors and law advisers. It also imposed 4.5 per cent VAT on coaching centres and English medium schools.
The member VAT said the department maintained average 13.87 per cent growth in VAT collection during the last ten years.
In fiscal 2006-07, the government realised Tk 124.11 billion (12411 crore) VAT against the revised target of Tk 124.80 billion, which was 11.06 billion more than that of the previous fiscal.