Georgetown: The Ministry of Finance is removing the 14 percent Value Added Tax (VAT) on private educational institutions effective January 1, 2018.
This announcement was made by Minister of Finance Winston Jordan during the presentation of the National Budget for 2018, today. Minister Jordan stated the decision comes “in view of the representations made.”
The tax requirement on private tuition came into effect following the passage of the 2017 national budget and the Value Added Tax (Amendment) Bill 2017 which amended the Value Added Tax Act, Chapter 81:05 last year.
The tax was introduced as part of efforts to widen the tax base; services provided by educational institutions were standard rated. At the same time, educational supplies previously zero-rated were exempted from the payment of VAT.
Private school administrators and parents alike vehemently protested the decision. The imposition of the VAT on tuition falls on the educational institutions and not the parents and students, Minister Jordan had explained during several engagements with the affected stakeholders.
This decision to reverse the tax will see the Guyana Revenue Authority suffering potential revenue loss valued some $342M. However, Minister Jordan assured that efforts will continue by the GRA to ensure that these institutions become tax compliant.
