Private university owners, students oppose tax proposal

Private university owners and students in Bangladesh are opposing a new government proposal unveiled this month to impose a tax on private university education in the country, despite several unsuccessful attempts at taxing private higher education in the past.

On 3 June, Finance Minister AHM Mustafa Kamal proposed a 15% tax on the income of private universities and private medical, dental and engineering colleges in his budget speech for the 2021-22 fiscal year in parliament.

A day after the announcement, the owners’ group, the Association of Private Universities of Bangladesh (APUB), issued a statement saying that the proposal was unacceptable and contradicted the Private University Act 2010 which states that private universities are not-for-profit institutions.

The APUB statement said many private universities are facing a financial crisis due to the COVID-19 pandemic and struggling to provide salaries for teachers and staff.

“Imposing a tax on income of private universities at this time might end up in closure of some newly-approved private universities,” the statement said.

APUB Chairman Sheikh Kabir Hossain told University World News that according to the Private University Act 2010, the government cannot impose the tax. “You cannot impose a tax on not-for-profit institutions,” he said.

Students’ ultimatum

Private university students are also protesting the government proposal. Under the banner “No VAT (value added tax) on Education”, they announced on 4 June that they would take to the streets in protest if the tax is not withdrawn by 10 June.

Brac University student Nusrat Farin said the tax would increase the cost of education for students, and burden their families at a time of global pandemic.

Students said that although the tax was imposed on the income of private universities, they feared that universities would collect the tax from them.

“In 2010, when the government first imposed a tax, it said that students would not have to pay taxes, the universities would. But we saw that universities had attempted to collect VAT from students at that time. I fear a similar thing will happen this time,” Tamzid Haider, a student at North South University in Dhaka, said at a protest rally on 8 June in Shahbagh, Dhaka.

A similar protest was held in Bangladesh’s port city Chittagong, local newspaper Daily Azadi reported. Students also formed a human chain demanding withdrawal of the government proposal.

Students have announced another protest rally on 10 June in Dhanmondi, Dhaka, and on 11 June in Rampura in front of the East West University campus in the capital.

A long debate on taxing private universities

The Bangladesh government has long been trying to impose a tax on the income of private universities, but has so far held off or backed down in the face of student protests.

It first tried to impose 4.5% VAT on private university education in 2010. However, it backtracked from the decision a few days later after widespread student protest.

In 2015 the government was adamant about going on with its decision to impose 15% VAT on private universities. This time, the country saw one of the largest protests in a decade, and the government eventually had to change its decision.

Private university authorities also went to court to prevent the government imposing a tax. In 2016, Bangladesh’s High Court declared illegal government orders imposing a 15% income tax on private universities and private medical, dental, and engineering colleges.

The present proposal of imposing a 15% tax on private universities has also been unpopular. Several prominent journalists and educationists penned columns in the local newspapers urging the government to change the decision.

Bangladesh’s celebrated novelist and journalist, Anisul Hoque, wrote a column in the most prestigious Bengali newspaper Prothom Alo criticising the proposal.

“The government has to listen to private university students. How can there be tax on education?” he asks.

Bangladesh has some 107 private universities with around 500,000 students enrolled and the sector is rapidly expanding. According to officials at the higher education regulatory body, the University Grants Commission, 87 more institutions have applied for permission to become a university even though educationists often question the quality of some private universities.

Bangladesh also has 49 publicly funded universities.