KATHMANDU: After four years of strong defiance to abide by the government's call to pay tax, the Private Boarding Schools' Organisation-Nepal last week decided to oblige, but it has found an easy way out. It has decided to levy the tax amount on parents.
As per a decision taken by PABSON central committee meeting, the private schools will pay one per cent tax to the government beginning next fiscal. There are about 9,500 private schools across the country.
When Prime Minister Baburam Bhattarai was finance minister in then government in 2008, he had decided that private schools would pay five per cent tax. It is believed that only a few 'big schools' have been paying tax to the government regularly. PABSON, however, has no record of the schools that have been paying tax.
Amid fierce protest from PABSON, the 'education service tax' was brought down to one per cent, but still the private schools were reluctant to pay, for what many believe the fear of getting their income disclosed. Another organisation of private schools N-PABSON, however, had agreed to pay one per cent tax. Now PABSON too has fallen in line but only after deciding to levy the required amount on parents.
President of Guardians' Association of Nepal Suprabhat Bhandari took strong exception to PABSON's decision to charge parents for the tax it has to pay. "It is unconstitutional to burden parents in the name of service tax. Education has been enshrined in the Interim Constitution as fundamental right. Education should not be compared with any FMCG item," he said.
Seeking anonymity, an adviser to the Government of Nepal said, "Education service tax cannot be justified, as it directly or indirectly will make education expensive. If the government wants to rein in educational institutions and make them transparent, it should increase the corporate tax or tax on their profits." Currently, private schools are paying 25 per cent corporate tax.
PABSON General Secretary though confirmed that they have decided to pay tax from next fiscal, he skirted the question whether PABSON would charge parents for the same. While declaring tax for private schools, Bhattarai then had said the tax was aimed at supporting children from the poor families.
Mana Prasad Wagle, an expert on education system, however, said the defiance (by private schools) was more because of the fear of getting their income and profit disclosed rather than losing an extra bit. “It (one per cent) hardly makes a difference for those parents who are already paying hefty sum for the children's education," said Wagle.