President to announce removal of VAT on private education fees

President David Granger has reportedly told senior members of his cabinet that he has decided that the government will be moving to remove the Value Added Tax from private school fees.

The announcement is expected to come before the end of today or by tomorrow, senior Government sources have told News Source.

The President’s decision comes on the heels of widespread criticism from private school owners and parents overt the move to add the 14% Value Added Tax to the already high school fees.

Just last Friday, a group of students from School of the Nations, who led a campaign against the tax being added to the fees, handed over a petition with more than 13,000 signatures in support of a removal of the tax.

Many parents over the past few weeks have taken to social media to make known their opposition to the move. The opposition, PPP, also criticized the move, calling it a lazy way to get tax dollars.

Finance Minister Winston Jordan, has been defending the move by pointing out that many of the over fifty private schools across Guyana are not tax compliant.

In a letter to the press, he challenged the private school owners to absorb the value added tax rather than have it passed on to parents.

At least one of the private schools rejected absorbing the tax and said there should be full revocation.

Senior sources in the government have said that the Guyana Revenue Authority will now be forced to ensure that all of the private schools become tax compliant and are no longer able to dodge the taxes.

Some of the schools are reportedly registered as religious schools and non-governmental organisations and that has allowed them to enjoy tax concessions. That could all change if the GRA decides to treat them all as businesses based on the millions that they make every year.

But senior Finance Ministry officials now fear that by the President reversing the imposition of the tax on private school fees, it could lead to other requests by various sections of the society for various taxes to be thrown out.

Just after the budget, there was widespread outcry against the imposition of the same value added tax on electricity bills over $10,000 per month and water bills over $1500 per month.

The government has moved ahead with those charges as statistics provided by the two companies have shown that the majority of their customers will find themselves out of the tax loop because their monthly bills are under the taxable amount.

The Finance Minister during his 2017 budget presentation announced a 2% reduction in the value added tax but also the widening of the value added tax net.