The government plans to impose a 15 per cent tax on private universities, and medical, dental and engineering colleges, including the ones offering IT education, in the new fiscal year (FY22) starting Jul 1.
In the budget unveiled on Thursday, Finance Minister AHM Mustafa Kamal proposed 30 per cent tax on the income of artificial juridical persons and other entities, not otherwise defined.
They pay taxes at the rate applicable for individual taxpayers in some cases, which Kamal said was “inconsistent with our philosophy of taxation”.
But still, the tax on privately operated higher educational institutions has been reduced to 15 per cent through an SRO, he said, proposing the inclusion of this rate of 15 per cent in the Finance Act.
In a 2007 circular, the National Board of Revenue or NBR said it had revised the income tax for private universities up to 15 per cent, bdnews24.com reports.
However, it said incomes of private medical, dental and engineering colleges and any private educational institutions will be tax-free, but filing tax returns will be mandatory.
In 2010, the NBR issued another circular where it said the authorities had “lowered” the income tax for private universities, medical and dental colleges, engineering colleges and institutions offering IT education to 15 per cent.
The Appellate Division in February this year asked the NBR not to collect the tax until an order is passed, allowing the board to challenge the 2016 High Court verdict that declared illegal collection of income tax from the private universities.
The Appellate Division also stayed the High Court order to refund the income tax collected from the private universities.
The government in 2015 also imposed a 7.5 per cent value added tax on tuition fees of private universities, medical and engineering colleges.
It, however, had to renege on its decision following several days of agitations by students, which brought Dhaka to its knees.