Muhith ‘not sure’ what he said on taxing private universities as govt distances itself

The finance minister says he is ‘not sure’ what he said on taxing the private universities at a meeting with editors.

AMA Muhith on Monday told the meeting he was planning to bring the private university owners under value added tax or VAT net.

He also said he did not know whether the owners would charge the students to pay the VAT.

Prime Minister Sheikh Hasina rejected his proposal, saying the government should support expansion of education, Planning Minister AHM Mustafa Kamal said after Tuesday’s ECNEC meeting that she chaired.

Speaking to reporters at the Secretariat after the ECNEC meeting, Muhith said the private universities will have to pay income tax, not VAT, on their profits.  

“Private universities are making profits. They will pay income tax, not VAT, on the profits. Yes, they (the owners) will have to pay income tax,” he said.

“I am not sure what I said yesterday. We might have imposed VAT once, but did not activate it. Generally educational institutions do not pay (VAT), but they make profits by charging (the students),” he explained amid confusions.

He noted the private universities were not paying any tax now on the profits they were making.

“They try to present themselves as non-profitable entities. The income tax people will look into the loopholes,” he added. 

Ruling Awami League General Secretary and Road Transport and Bridges Minister Obaidul Quader, however, said in a statement that the comments on taxing the private universities were Muhith’s personal views, not the government’s.

Facing widespread protests by private university students, Muhith scrapped his plan to impose VAT on their tuition fees in 2015.

The private university students, who are demonstrating for quota reforms now, said on Tuesday they were also protesting against Muhith’s new plan to impose VAT on the private universities.