PABSON says schools will rather close down than pay tax

A week after Finance Minister Dr Baburam Bhattarai said the government would not allow students of private schools that fail to pay Education Service Tax (EST) to take the upcoming School Leaving Certificate (SLC) exams, school owners have said they would rather close down the schools than pay the EST.

Speaking at a press conference organised in the capital on Tuesday, Bhoj Bahadur Shah, chairman of Private and Boarding Schools’ Organisation, Nepal (PABSON)-the umbrella organisation of private schools-said they were not in a position to pay any tax to the government and would rather hand over the schools to the government.

We are running the schools without a penny from the government; we will let the government run the schools if it can, said Shah.

He also warned to bring the students to the streets to protest if the government does not allow them to take the SLC exams.

In response, Finance Minister Bhattarai said such stance of the schools would be taken as dissidence with regulations of the statutory government and would be dealt with legally.

The government had announced 5% EST through the budget speech in September, last year. Only a handful of schools have paid the tax so far. There are about 10,000 private schools in Nepal.

Students taking the SLC exam in April are in a confusion due to the row between their schools and the government. nepalnews.com Feb 25 09

Source : http://www.nepalnews.com/archive/2009/feb/feb25/news03.php

 

Pay the GODDAMN taxes and raise the economy of the country, folks !!!

I fully support the idea of Dr Bhattrai of bringing private schools under tax.
These private school are operating as a business not as a social service..... and getting every penny they could get out of the parents... It is very legitimate to tax private schools.
5% is too less, bring private school under Company Act, and make them pay as much as other companies do. 

I accept this step from the government. 
WELL DONE

No wondet the 5% Tax will be added to the tution fees from next month.

 

 

Education sector should not be taxed, but the private schools in Nepal are operating like family owned business houses. They are not transparent, are making a lot of money and are owned by a few people. With heavy charges on students they increase their financial assets in geometric order. Those parents who pay their hard-earned money do not own anything that the schools have. So, the schools are operating like a service providing industry, which is wrong.

Baburam and company does not want to fix this problem by forcing the schools come out from the business model operation. They don't want to make these private schools transparent. They don't want to turn these PRIVATE schools into Private-Public community owned schools. They don't want to make these schools cheap favoring parents. But they want to charge tax on the rampant looting ongoing in education sector and maintain integrety of the business oriented schooling system.

Charging tax will not affect these private schools at all, because they will start increasing fee adding the financial load to parents soon or late. In the long run, this policy will suffer ordinary citizen and ruin the education sector. So, despite being disappointed by these money-hungry private schools' rampant charge and unjustice to students and parents, I am not in favor of taxation policy in the education sector. The government must bring a new policy to clean up the mess in the private education sector.

Don't understand that they are taxing education SECTOR . It's BUSINESSes...they are taxing. You can't make money by just branding your business as school. Businesses MUST always be taxed. Their accounts must be transparent and they must pay tax too.

I totally agree the governments move to ask the schools to pay taxes.. These so called private schools are nothing but business to rip off families. These so called educators will be the first one to complain that the government is not working as they are supposed to when it comes to development. But run away miles when the government ask for their support to operate the government.

I think this 1st time the schools should pay their taxes and if in case the government does not utilize the money in an appropriate way then it would make sense to hit the streets. Educators are also threatning government to hit the streets. Role models that should say a closed country is not an ideal coutry are willing to call strikes rather than help promote welfare. Good Going

Private School are no better than businesses in Nepal. I have yet to find one Non-Profit private school. It would make sense to not tax non-profit private institution but TAX all those plus-twos and boarding schools that are ripping our citizens off in the name of quality education.

Why only 5%? I say tax them 20%. They make education a business and have the balls to tell us they should be exempt from taxes? What kind of hypocrisy is that?

school will shift the burden to parents directly or indirectly with playing around fee structure. What can collecting tax do in a country where there is no accountablity and responsibity. Money will come from schools and go in govt officers pocket. Set up rules and regulation first to keep track of money spend before even thinking of collecting it.

In my opinion, it should be something like this:

(1) They should pay tax if they are charging more than certain amount of fees from individual students.

(2) % of Tax waiver if certain % of eligible taxes are utilized as scholarship to  disabled/disadvanged/deserving  students.

They're shooting their own foot.

1stly, govt does not provide any subsidies or help to these schools. So in order to help pay bills, they will have to charge their students.

If they don't comply with Govt's warnings, they might leave the schools in the hands of the Govt. Then what? Then, you might be able to imagine the quality of education that our nepali youth will be getting.

If quality of education goes down, who's gonna send their sons/daughters to school in Nepal when there are schools in India which provide for much better education at almost the same price?

Just adds to the brain drain.

Targeting schools will not result in anything positive.

My opinion (feel free to disagree).

Let me pin point on the words by government sector,

"the government would not allow students of
private schools that fail to pay Education Service Tax (EST) to take
the upcoming School Leaving Certificate (SLC) exams"

is it fair enough, do students need to suffer if their schools fail to pay the tax??? why don't government come up with different statement rather than threatening student's future. The statement can also be said like to take strict action against the schools and strip their license off if they fail to pay the tax within certain duration.

The best option is to create a tax bracket, (similar to income tax bracket) for private schools depending on income they generate, tuition fee they charge, and the amount they spend on day to day operation of school. But the fate of above option will depend on good policing mechanism and Nepal lacks that big time.

mr president, if u really have target to be one someday, then let me tell you, the taxation policy doesn't change a shit in Nepal, unless we have willingness to pay it... Do u think Nepal's economy is in deficit, I don't think so, the main issue is people trying to expand their expenses and usage in paper terms so they have to pay less tax or none. the policy of tax bracket may help in some countries where citizens have faith in their government and obviously loyal. Instead of building new policies I think we should create awareness among the people and try to gain their faith by proving our words, and it certainly takes time for that, but we are starting from trash and we have plenty of time, after all "Time brings the revolution and people just follows the time" - Dr. Sathi Mero

I 100% belive private school should be paying tax ..Its privately own business..and they should pay tax as any other business.They been charging heap loads of fee .

yes private schools are for business ( it's a age old truth dammit..) and they should pay taxes but people are not understanding the real problem. The tax fiasco behind this  is that maoist wants to close all private school but cannot right now so tax levy is to make harder for school to operate. Maoists wants to make up to 12th grade free (which is not bad either) but their hidden agenda is to control the mind of youngster through government direct subsidy. The real problem in Nepal  was fully government funded colleges and universities giving political ammunition  of non-stop tire burning and bandh for political parties, scenario has changed on this matter from adult students to school students now which only maoist needs and were eyeing on. If maoist had good intentions, they should have focus more on govt. competition rather than hammering with tax atleast until  literacy reach 90-100% and we all know the govt efficiency. When real intention of govt. is to eradicate all private school why pabson would willing to pay taxes to help their agenda? remember taxes are paid in developed countries when they truely believes they can prosper and certainly not govt's  right but previlege. Same thing with majority people are not willing to show their true cash properties despite the warnings, after all,  maoists were no. 1 extortionists in the country. Would you show your all skeleton in closet to reformed daku mansingh? I wouldn't. I've been telling long, maoist  will have hard time convincing ordinary prosperous people no matter what good or bad intention because their base was bad.   And inorder to develop country money is needed thats the reality, idealism are bound to confined in the papers only.

Why private school owners should pay the designated 5% tax?
1. Private schools don't even pay a good salary to their teachers.
2. They take a huge amount of fee from the students.
3. They are just into money making business, and act like they have no role to the community and country.
4. The 5% tax is used in education sector, specially to educate children in remote places.
5. Parents of the students who study in private school should be happier that their money wud be used to educate a poor child.

I am not a Maoist, but I fully support FM's tax ruling over private school.

yesta muZi pachaki sarkar lai kasle tax tirchha
tireko tax sabai YCL ra PLA lai ho
ani school banda garaune pani tiniharu nai ho

desh ko lagi kehi garne hoina, bhatta khayo basyo
if you dont believe check it out

Most Private Schools in Nepal are run as Business, they are there to make Profit therefore should be taxed. Or make Subsidies to Admit People who cannot Afford those Private Schools as a Tax break. 

No doubt private schools are business in Nepal. Schools are registered under the Company Act and are liable to pay income tax as any other company.The District Education Office (Jilla Sikchya Karlaya) is there to monitor the transparency of these schools. The officials can come any time to audit accounts of private schools. This is the failure of government for not been able to monitor properly and make schools liable to pay tax that they schould be paying. The question arises - why should schools/parents pay extra money for the failure of government?

In other hand, 5% tax on revenue is huge burden to any business. Whether or not schools are profitable, they need to pay 5% tax as per new rule and in addition income tax is always there if they are on profit. Which law allows duel taxation for a single sector? It looks like govt. is formulating these policies looking on few big schools like LA,GEMS,Galaxy,etc. What about private schools in remote areas where they are charging low / moderate fees?

I think the decision to impose 5% tax is a mistake, rather govt. should encourage schools to maintain transparency by motivating them. Dr.Bhattarai is eyeing to collect revenue as per his target by hook or crook and failed to formulate policy for long term.