14% VAT on Education: Petition calling for its removal for submission today

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Dr Brian O’Toole

The online and paper petitions calling for the removal of 14 percent (Value Added Tax) VAT on private education is expected to be delivered to The Ministry of the Presidency (MOTP), the Finance Minister Winston Jordan and the Education Minister Dr Rupert Roopnarine, this afternoon at 16:00 hrs.

This is according to Dr Brian O’Toole, Director of School of the Nations, the private educational facility that has been championing the cause, calling for the ‘burdensome’ 14 percent to be removed from private schools.
The petition which has reached 13, 460 signatures as of this morning saw it genesis at Nations, but it has since taken a dynamic direction as other bodies, schools and the citizenry have added their voice and support to the cause.
A protest calling for the removal of the 14 percent VAT on education and other basic amenities, which is being organized by members of the business community, is expected to take off next week in front of the Guyana Revenue Authority (GRA).
Below is an edited commentary by Dr Brian O’Toole on the addition of 14 percent VAT on private education:

Over the past two weeks, as you will know, there has been extensive coverage on the radio and TV and in all four newspapers and on social media about this issue. Almost every comment has supported the abolition of the 14% tax. Indeed, almost the only comments in support of this tax have been from members of the government.

It has been argued, by members of the government, that if you partake in private education then, by definition, you can afford the 14% addition. Our petition was started by the 6th Formers at Nations but has since been supported in great numbers from students attending a host of private and public schools.

The great majority of students attending private educational institutions in Guyana are from humble backgrounds and can only attend these places of learning as a result of the sacrifice on the part of their family members. In a number of cases, these same students may now be forced out of these schools because of the additional 14% tax,  a reality acknowledged by Minister Jordon in the news.

It has been said that these students “have a choice.”  For some that may be true, but that is not true for the majority. One of the most popular programmes in Guyana, at the tertiary level, is the Association of Business Executives (ABE) series of internationally recognised diplomas in the areas of business, management, ICT and travel & tourism (See www.ABEuk.com).

There are now about 1,200  students in Guyana pursuing these diplomas . The only place these diplomas are offered is in private institutions. At Nations alone we have more than 850 persons pursuing these diplomas. These courses are also soon to be introduced  at our branch of Nations in New Amsterdam.

Furthermore, the Regional District Council of Linden/Upper Demerara recently had consultations with Nations about bringing this programme to Upper Demerara. ABE has 232 Centres worldwide, Nations is now the 5th biggest in the world in terms of enrollment. The exact same programme is offered in Trinidad at 2 to 3 times the cost compared to the providers in Guyana (ie Nations, ATC the Business School).

ABE caters for school lavers and offers programmes from CSEC to degree level. There is simply no comparable, internationally recognised programme, available in the public domain. The great majority of these youth come from humble backgrounds. If the 14% VAT is not lifted we have been informed that many of them will simply be unable to pay and will return home to join the ranks of the unemployed and indeed the unemployable.

For twelve years Nations in Georgetown has funded a pro bono branch of Nations in New Amsterdam. It survives through funding from Nations in Georgetown and the scholarship support of persons in North America. Last week I met a number  of these benefactors at special meetings in Hamilton, Aurora, Guelph, Toronto and Grand Bend in  Ontario.

When they learnt of the 14% additional tax they simply signed the petition and said they would now be forced to look for other projects to support, in other parts of the world, where such additional VAT taxes do not exist.  This may tragically lead to the closure of the school which has existed for 12 years and which has helped to educate several thousand children and youth from Berbice.

It has been said in the media by members of  the Cabinet that they have a “choice”, I.e. the public education system.

But, it is precisely because of the limitations of the public education system that thousands of parents in Guyana, from all walks of life, have made that sacrifice to move to private education.

But, as Minister Jordan acknowledges, “public education is not at the stage is should be.” Is the choice then to return to the very system that is in need of such help? The same decision to opt for private education has indeed also been made by a number of government ministers for their own children.

If the “choice” is then to return to the very system that Minister Jordan says is the subject of a Commission of Inquiry how will that system now cope with the return of literally thousands of students to classrooms that are already overcrowded and under resourced?

It was also stated in the media by Minister Jordan that many of the 54 private education providers are not “tax compliant” and are in fact operating under some umbrella of “charter school “status and therefore not liable for tax.

If that indeed is the case surely the GRA should examine exactly this issue and ensure there is level playing field for all 54 institutions.  For our own part, at Nations, we are fully tax compliant and pay every cent in tax that we are legislated to pay in the form of income tax and corporation tax.

We fully understand that this is our obligation and duty. Where is the justice in imposing a 14 % additional tax because apparently, some (indeed it is claimed by the Minister “many “)  of those 54 institutions have engineered some form of tax loophole. Surely justice calls for fixing the system not punishing these who are already fully tax compliant and who are indeed paying millions of dollars in taxes.

It has also been suggested that institutions like Nations should simply absorb the 14% increase and add these additional millions to the existing taxes they pay. Perhaps when our suppliers do the same and absorb the VAT as their own expense then such a fine idea could be considered.

The depth of the feeling about this issue is eloquently illustrated by the more than 1,324 comments on the petition. Please see the following link for all these comments:

https://www.ipetitions.com/petition/education-vat-free

These comments display disillusionment, dismay and disenchantment with a system that imposes further hardship on an already hard pressed populace.

At one of our early public meetings on this issue one mother of a student of ours admitted that she too had the misguided impression that all the students at Nations were rich. Now she realises this pre-judgement was simply false and she acknowledged that publicly. One misguided and misinformed perception was therefore corrected via closer inspection.

One impression of Nations can be the crowded car park at three pm each afternoon.  Less visible are the bicycles that also come to collect the children.  A more careful  observer in the afternoon would see the 100 children from Tiger Bay who have come into Nations, two or three afternoons per week, for the past five years, for free classes in literacy, numeracy, computing and for art, music and steel pan. Does this need to be advertised and paraded in the media to correct stereotypes and prejudice?

Six of these children from Tiger Bay have received scholarships to attend Nations.  The afternoon programme at Nations operates with the support of Mings, Gafoors, Germans  and New Thriving Restaurants.  An  even closer examination would be required to discover that four of the Nations teachers have come together to pay the fees of one of those children from Tiger Bay to attend Nations full time. Will the four teachers  now be able to afford the 14% increase?

Few others know about another child from a very poor area who comes to the school early each morning to get breakfast from one of the teachers, then get a shower (as she has no running water in her home) and only then change into Nations uniform simply because she cannot keep her uniform clean in her very modest home.  Does she have another choice?

There is no political agenda behind this petition – we have avoided the overtures from a variety of political opposition who wanted to turn this grassroots response, into a political game – we have resisted all these attempts.

We make no pretence to being  economists, neither are we business people, we are simply educators trying to be of service to this country that we all hold so dear.

That same desire to be of service led to the creation of the On the Wings of Words literacy programme, based at Nations, that trained thousands of literacy facilitators. It was also the inspiration behind the movement, Youth Can Move the World, that inspired thousands of youth, from every region of Guyana, to reflect on issues of gender equity, domestic violence, HIV/AIDs,  protection of the environment, sexuality and then serve as mentors to other youth in  their own communities.

These programmes were offered for more than a decade, attracted thousands of persons from literally every region of Guyana and never at any cost whatever to those attending. If profit was the motive behind Nations we would surely have been better advised to invest those same resources in money-making ventures.

These examples are shared to possibly help clarify some prejudices and pre-conceptions. The acts of service however have not been offered as charity rather each of these activities has greatly enriched Nations and significantly expanded its vision and role in the Guyanese society.

Some might argue that Nations should still pay the 14% VAT – if we are allowed a choice we would prefer to continue to pioneer the above initiatives rather than simply add to the millions we already pay in tax. No doubt other private schools have similar stories to tell – I can only share our experiences. I hope indeed that they share their stories to help the government review the 14% VAT and explore other possible streams of revenue especially as we enter a new stage of our development as one of the biggest storehouses of oil in the world.

In so doing it is surely the hope of the 13,000 plus persons who signed this petition that the government will defend, support and indeed champion the attempts of our citizens, from all corners, to improve the future for their children so that they may be given the opportunity that previous administrations may have  denied them. We simply request you support for their vision, their hopes and the dreams they have for their children to simply be all that they can be.

We ask the government to change its decision on this matter. Clearly it  is not an easy decision but thousands of persons from all regions of Guyana, and many corners of the diaspora, are saying that is it now the right decision to make.

Dr Brian O’Toole
Director
Nations
E mail: [email protected]

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