Kathmandu, March 25:

Finally, institutions agree to pay taxes under various schemes.

The row between the government and the Association of Private Education Institutions of Nepal (APEIN) over the imposition of Education Service Tax was resolved today after the two sides agreed to set up an Education Development Support Fund (EDSF) to support poor and marginalised students in remote areas and scrap the five per cent service tax on private schools.

The ministry organised a press conference today to publicise the 14-point agreement. The ministry claimed that the schools have agreed to pay the tax in the form of contribution to the EDSF. The two sides have also agreed to form an Education Council and an education sub-committee under the Revenue Consultation Committee. The agreement scraps the five per cent EST imposed by the government through the budget speech for the current fiscal.

According to the agreement, the APEIN will set certain criteria to collect funds for EDSF from the schools, based on their fee structure.

They have also agreed to form a sub-committee under Revenue Consultation Committee to recommend tax or other provisions related to private educational institutions in the future.

The government will form an Education Council represented by all political parties and seven private educational organisations to improve the quality of education and ensure stability and security for the continuity as well as ownership and professional guarantee of private educational institutions.

The agreement also agreed to declare all educational institutions ‘Zone of Peace’ by issuing a commitment proposal from the parliament. The agreement also speaks about discount on purchase of educational materials by private schools.

Bhoj Bahadur Shah, president, Private And Boarding Schools’ Organisation Nepal, said,

“Though we have only been able to change the name now, our ultimate aim is to completely scrap the provision of tax from education sector.”

The agreement was signed after four rounds of meeting with Finance Minister and several rounds of meeting with other officials of the ministry.

Krishna Hari Baskota, revenue secretary at the finance ministry, said, “The government’s only intention was to support the students from marginalised communities and remote areas. Therefore, the government had appealed to private schools to provide funds through tax.”

He said, “The contribution of private sectors to enhance education quality is unquestionable. The funds collected in EDSF would help to enrich poor students in remote places.”

He said the EST collected by the Inland Revenue Department from 41 schools so far would be transferred to EDSF.