Half of the tax due from private universities has not been paid

The government has failed to realise more than half of the Tk 1.23 billion due in taxes from private sector higher education institutes in Bangladesh over the last 16 years.

A report by the National Board of Revenue (NBR) says that more than Tk 850 million claimed by the government as tax from these institutes are stuck in lawsuits.
 
Between 1998-99 and 2014-15 FY, the government realised Tk 477.91 million in taxes from private universities, and medical and engineering colleges.
 
The universities have to pay a 15 percent tax on their revenues.
 
Tax claims worth another Tk 853.38 million  are still unrealised due to pending legal proceedings in the High Court.
 
The NBR has fined some private universities in the last fiscal for not filing tax returns. 
 
But these institutes says they should not be taxed as all of them operate under non-profit trusts.
 
Veteran politician and Awami League leader Suranjit Sengupta disagrees.
 
According to him, the private university owners are making much profit after being registered as non-profit entities.
 
The government imposed a 7.5 percent VAT on tuition fees of private universities, and medical and engineering colleges in the budget for 2015-16 fiscal.
 
Students have taken to the streets opposing the decision because they fear this will add to their financial burden. 
 
On Wednesday, protesting students of the East West University clashed with police at Dhaka’s Rampura.
 
The next day several private university students took to the streets in different parts of the city. They blocked major roads, and effectively crippled Dhaka traffic.
 
The same day the NBR clarified that the universities would have to pay the VAT as it was already included in the tuitions fees they charge from their students.  It said the VAT amount should not be separately realised from the students.
  
But the clarification failed to satisfy the students and they are continuing to agitate.
 
As the agitation continues, the NBR  prepared a report on the tax situation of private sector higher education institutes.
 
An NBR official, on condition of anonymity, told bdnews24.com that the report was prepared for the prime minister and the finance minister.
 
The report says, out of the 65 private universities in Bangladesh, 25 are involved in income tax –related litigation.
 
But the NBR is yet to clearly spell out a revenue projection from the VAT imposed on tuition fees.
 
NBR officials declined to comment on the matter and its chief could not be reached on phone despite several attempts.
 
An NBR official, however, said that it would be difficult to accurately forecast projected revenue from the VAT from private universities.
 
“Tuition fees vary in private universities. The curriculums also vary from institute to institute. Some courses end in two years in some universities, but are spread over a longer duration in other institutes. So forecasting is difficult,” he told bdnews24.com asking not to be named.