Muhith backtracks on VAT on pvt univs

Finance minister AMA Muhith on Tuesday backtracked on his position on imposition of value added tax on private universities hours after prime minister Sheikh Hasina ruled out bringing private educational institutes under VAT net.
During a dividend hand-over ceremony by state-owned Investment Corporation of Bangladesh at secretariat, Muhith said income tax instead of VAT would be imposed on owners of private universities.
He admitted that his statement on imposition of VAT on private universities he made on Monday after a pre-budget parley with editors of the national dailies in the capital was a bit wrong.
Admission by Muhith came hours after AHM Mustafa Kamal, quoting prime minister Sheikh Hasina, said the government had no plan to impose VAT as stated by the finance minister.
A statement, issued by Awami League general secretary Obaidul Quader, also termed finance minister’s statement on imposition of VAT on private universities personal. 
It was not the statement of the government, said Quader, also the road transport and bridges minister.
At a briefing Kamal said the PM cleared her position against expansion of VAT net proposed by Muhith while presiding over the meeting of the Executive Committee of National Economic Council at the planning commission.
Asked whether Muhith said anything at the meeting, Kamal said that the prime minister’s directive was final.
Kamal noted that there was no option but to increase VAT collection to spur the country’s tax-DGP ratio, one of the lowest even in South Asia.
But this was not the right moment…………., he noted.
He added that there would be a lot of discussion with stakeholders before enforcement of the new VAT law to be implemented after 2019.
In 2015, Muhith had declared that private educational institutes would be brought under VAT net but backtracked in the face of widespread protest by students.
Muhith stated that private universities must pay income tax if they earned profits while accepting dividend worth Tk 51 crore from the ICB at secretariat.
At present, there is no provision of income tax on public universities.
Asked what per cent of income tax would be imposed on private universities, Muith said the amount would be determined by the amount of profit.

News Courtesy: www.newagebd.net