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| Friday, 12 March 2004 |
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VAT on school fees - a rights issue
I wish to comment on the letter under the caption 'Vat from school fees' which appeared in 'Daily News' of January 23, wherein Epharm of Moratuwa appeals to the Minister of Education and through him to the Government to remove VAT from school fees, charged by private and other International Schools. GST - on school fees charged by private and International Schools was a budgetary proposal introduced by Prof. G. L. Peiris, when he was the Deputy Minister of Finance in the former PA regime. The then opposition in the Parliament comprising mainly of UNP voted against this proposal to impose GST at 12.5% on school fees charged by private and International Schools, when they voted against the budget. But in 2001, when the UNP was voted into power and formed the government, did they remove the GST on school fees? The answer is - no. The Minister of Finance K. N. Choksy retained the tax and called it - VAT. Initially VAT was imposed under two slabs - 10% and 20% - and VAT on school fees came under the 10% slab, thereby effecting a reduction of 2.5% from the earlier charged 12.5% as GST. Then came the bombshell in the following budget. While presenting his second budget Mr. Choksy brought the two slabs to an uniform rate of 15%, under the pretext of making the collection of VAT easier for the tax authorities - thereby effectively increasing the 12.5% GST charged on school fees by the PA regime to 15% as VAT. With the introduction of the uniform rate of 15%, even payments for water bills and lease instalments for private buses got increased, when the rates for the said payments too got increased to 15% from the original 10%. But the Minister in charge of National Water Supply and Drainage Board, Arumugam Thondaman, was quick to realise the hardship such as increase would cause the domestic users, and he promptly got Cabinet approval to waive the increase from the domestic users. When the private bus operators requested the authorities to waive the increase from the lease instalments, the Minister of Transport dragged his feet, while holding several rounds of 'talks' with the bus operators. A one-day tokens trike followed by a threat of an islandwide strike, settled the issue in favour of the bus operators - and they got the increase waived. But the parents of the children who study in private and International Schools were not that lucky. In spite of the repeated requests made by the parents in the press, explaining the injustice caused to them by this tax, the Minister of Education maintained a deafening silence. A Minister of the calibre of Arumugam Thondaman would have taken swift action to redress the grievance of the thousands of parents, who incidentally are unable to twist the arms of the authorities as the private bus operators did. If the VAT had been imposed on International Schools only, it would have made a little sense, as the International Schools coach their students to sit the London exams and not the exams conducted by the Department of Examinations here in Sri Lanka. The private fee levying schools such as Bishop's, S. Thomas', St. Bridget's, Museaus, Ladies and Trinity are not factories that produce spare-parts for industries. For more than hundred years these schools had been part and parcel of the education system in the country. They have a chequered history and had maintained the high standards even during adverse situations. Right through the years, these schools followed the guidelines laid by the Education Ministry and had prepared the students to sit the G.C.E. (O.L.) and G.C.E. (A.L.) conducted by the Department of Education. Years back when the medium of instruction was changed from English to Swabasha, these schools too followed the changes proposed by the Ministry of Education, and since then the medium of instruction of these schools had been either Sinhala or Tamil. In addition to various academic streams, sports and other facilities had always been provided to children of these schools to give a complete education to the child. This achievement is all the more great, since these schools had never received a red cent from the Government. For development activities these schools rely solely on funds raised from various activities and funds obtained from well-wishers. So, why penalize and harass the parents of the children who attend these schools by the imposition of VAT? In case of private fee levying schools managed by Christian authorities, a good percentage of yearly new admissions to these schools had always been allocated to other denominations as well, to allow the children to get familiar with other religions and cultures prevalent in the country. Today, the clamour for schools with discipline and good academic performance is greater than ever. A few storeyed buildings, a playground and name board can never be called a school. A dedicated principal and a dedicated tutorial staff are of prime importance. If these schools had not been in existence today, what would have been the predicament of the parents of the children who attend these private fee-leving schools? Can the Government find substitute schools for these children? Silently and efficiently these schools assist the Government in a very big way in implementing the Government policy of imparting a good education to children of this country. I request the administrators in the Education Ministry to walk into one of these schools on a parents' day or on a prize-giving day or on a sports-meet day and talk to parents - not all of them are company chairman or gem merchants. So many from the middle class of society send their children to private fee-leving schools for so many reasons. The main reason being, that they cannot get their children admitted to Government schools or State-aided schools with similar educational facilities. In such a situation is it reasonable to impose VAT and penalize a section of the population who send their children to private fee-levying schools? What moral right does the Government have to impose VAT on private fee-leving schools only, by differentiating between Government schools, State-aided schools and private feeleving schools? The action of the Government to impose VAT on school fees charged by private schools is a gross violation of human rights. While reflecting upon the various proposals made by Finance Ministers of yesteryear, the decision to tax the parents for sending their children to private schools stands out as an idea put forth with a tinge of jealously and grudge and it shows the level of bankruptcy to which the Finance Ministers had fallen in their search to find money for development activities. Way back in seventies, the then Minister of Finance the double Doctor of Economics Dr. N. M. Perera - of whom many predicted that next to Harold Wilson and George Brown, he would have been a brilliant Labour Party leader if born in England - made a series of blunders, to end up with the biggest blunder of all - to allow toddy tapping through out the island with the minimum of restrictions, which made the press to identify him as Pere"ra". Before long, Premier Sirimavo Bandaranaike showed him the exit. In the same vein, President's Counsel K. N. Choksy would have been a shining star within the open courts and inner chambers and may have contributed much to unravel the legal complexities in the highest courts of Sri Lanka, but this contribution to brighten the lives of the vast majority in this society is almost nil. If not for the dissolution this 'Learned Friend' himself would have definitely shown the whole Government the exit. - Srilal Jayasuriya |
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