Prime Minister Sheikh Hasina has rejected a proposal put forward by Finance Minister AMA Muhith to bring private universities under the VAT law, stating that their incomes will remain free from tax.
The prime minister made the remarks during an ECNEC meeting on Tuesday where Muhith raised the matter, according to Planning Minister AHM Mostafa Kamal.
The prime minister’s rejection on slapping the tax on private universities comes amid a series of student demonstrations calling for reforms to the quota system for government jobs, which culminated in a clash between protesters and police and members of the Bangladesh Chhatra League on the Dhaka University campus on Sunday.
“The prime minister said that no new tax will be imposed on students of the private universities,” Kamal said at a briefing following the meeting.
“All types of income of the private universities will remain tax-free in order to promote education.”
Earlier in a pre-budget event, Finance Minister Muhith had said that private university owners would have to pay VAT.
“The finance minister’s comments regarding the imposition of VAT on private universities is his personal opinion and does not reflect the views of the government,” said Road Transport and Bridges Minister Obaidul Quader in a statement issued from his ministry on Tuesday.
The government had imposed VAT on education two years ago. In September, 2015 students at private universities began a protest against VAT on higher education, forcing the government to retract it.