In the current fiscal year 2022-23 in the country, 81 thousand 449 crores were allotted to the education sector. Education sector is considered as one of the priority sectors in the annual budget. However, the education expenditure is also increasing with the increase of everything in the budget of the next financial year 2023-24. Even in this year’s budget, the government is going to impose 15 percent value added tax (Musak) or VAT on ballpoint pens, one of the most important tools of education. Finance Ministry and National Board of Revenue (NBR) sources have confirmed this information.
Education stakeholders of the country say that imposing VAT on the basic materials of education is not reasonable. They said that it will put pressure on the students’ families. They are advised to reconsider the budget-related matter.
Meanwhile, students and parents are in trouble due to the unbridled price of educational materials even before the budget. The price of each ingredient has increased by 25 to 30 percent. If the price increases again, the parents of the students will be in trouble. According to them, it is the responsibility to meet the household expenses under the pressure of high inflation. A lot of money has to be spent on the education of the children after accepting many sacrifices. If the prices rise again, it will become difficult for children to continue their studies. Maybe you have to deduct the cost of food and continue with the cost of education. They advise the government to withdraw from such a decision.
On the other hand, the list of VAT increase in the next financial year’s budget includes plastic tableware, aluminum kitchenware, polypropylene staple fiber and tissue paper. Polypropylene staple fiber currently has no VAT levied. However, the VAT in this sector will be increased to 5 percent in the budget of the next financial year. Apart from this, VAT is currently imposed at the rate of 5 percent on plastic table-ware, aluminum kitchen ware and tissue paper. However, in the next financial year’s budget, this rate is being increased by 2.5 percent VAT to 7.5 percent.
However, in the current fiscal year, 15 percent Value Added Tax (Musak) or VAT is imposed on the sale of sweets, but it will be reduced to 7.50 percent in the upcoming fiscal year. A product in high demand is likely to decrease.
The NBR has outlined the terms of the $4.7 billion loan provided by the International Monetary Fund (IMF). The agency will collect an additional 20,400 crore rupees from the VAT sector in the next financial year 2023-24 through four ways. NBR has set a target of Tk 12,400 crore to Tk 13,500 crore additional VAT collection through the next budget and regular measures. The organization aims to collect Tk 5,500 to 6,000 crores through the revision of cigarette tax rates.
Besides, NBR wants to collect additional Tk 1,000 to 1,500 crore through various exemptions and Tk 400 to 500 crore through Electronic Fiscal Device (EFD).
In this regard, the concerned officials of the Ministry of Finance and NBR did not agree to make any comments. They say that it will not be right to talk about this before the budget. However, nothing will be done in the budget, which will put pressure on the common people. NBR officials say there is no pressure from the IMF to formulate the budget, but there is pressure to raise revenue in every budget. To increase their capacity, they have to increase the VAT collection from their own insistence.
Regarding this, the former vice-chancellor of Dhaka University (DU) AMS Arefin Siddique said that the government should focus on paying less excise duty, VAT and other duties on the basic components of education materials such as ballpoint pen, paper, pencil, razor. Because these are the minimum materials for all students studying in educational institutions.
The education budget is already very low. Even then, if their prices are increased, then the corona epidemic, the global recession situation will put a big pressure on the families of the children. Those involved in the budget formulation of the government will consider these issues practically and accordingly they will make recommendations – added AMS Arefin Siddique.
Policy Research Institute (PRI) executive director Ahsan H. Mansoor said, paper, pen, books – these educational materials are exempted from VAT in many countries and not in many countries. It depends on the capacity of the government. Pens are used in office-court apart from students. NBR needs revenue. And exemption is not mandatory in this sector. However, students would get benefits if exempted.
