What prompted govt to review VAT decision

The government yesterday withdrew value added tax (VAT) on private universities and medical and engineering colleges to prevent student protests from taking a turn for the worse, according to sources in the ruling Awami League.

Public sufferings due to the demonstrations and keeping the ruling party popular among young voters, especially students, were also important factors behind the government decision to withdraw the 7.5

percent VAT.

On Sunday evening, Prime Minister Sheikh Hasina discussed the issue with Public Administration Minister Syed Ashraful Islam at the Gono Bhaban, and decided to withdraw VAT on private universities, said the sources.

Later, several leaders of Bangladesh Chhatra League met the PM at the Gono Bhaban and requested her to withdraw VAT. She assured them of doing so, said BCL leaders.

BCL President Saifur Rahman Sohag told The Daily Star yesterday, "We thank both the government and Sheikh Hasina for meeting our request to withdraw VAT."

Yesterday, Hasina talked to Finance Minister AMA Muhith about the VAT issue after a weekly cabinet meeting. Later, she conveyed her decision to withdraw VAT to National Board of Revenue Chief Nojibur Rahman, said government sources.

Emerging from the meeting, the PM told some of her cabinet colleagues that she was unhappy with the finance minister and NBR officials for creating confusion over the VAT issue, said the sources.

A minister, who was present there, said the PM told them that misunderstanding was created over some issues and the government had to clarify those.

Talking to The Daily Star yesterday, several AL leaders blamed the finance minister for the crisis over the VAT issue.

They said Muhith created confusion over the issue by giving contradictory statements.

"He [Muhith] is making things complicated. It is not expected from a senior leader like him," said a senior AL leader, seeking anonymity.

The party leader also blamed Muhith for the ongoing movement of public university teachers.

On Sunday, AL Joint General Secretary Mahbubul Alam Hanif said the government would get around Tk 60 crore from VAT on private universities. It was unnecessary to invite troubles, which might cost the government Tk 6,000 crore, for getting this sum.

"I don't see any rationale for imposing this VAT," he said at a programme in Natore.

Hanif also alleged that some vested quarters were instigating student protests.