Private varsities cry over tax payment
 
Posted on: 2013-Jul-22        
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Private universities in the country have called for an immediate restoration of their tax exempt status.

Until recently, private universities in Ghana were exempted from the payment of corporate tax in accordance with Section 10 (1d) of the Internal Revenue Act.

Section 10 (1d) of the Act exempts “income accruing to or derived by an exempt organisation other than income from business”. Section 94 of Act 592 defined exempt organisation as “religious, charitable or educational institution of a public character”.

The Internal Revenue Act (Act 592) was amended by Act 859 in May, this year, with the aim of bringing private universities into the tax net.

But the development, according to the Conference of Heads of Private Universities in Ghana (CHPUG), was detrimental to the interest of university education and Ghana’s development planning.

There are 63 private colleges and universities, admitting 26 per cent of students who enter universities every year. In the 2011/2012 academic year, the private universities had an enrolment of 50,000 students.

A statement signed by the Chairman of CHPUG, Professor Kwesi Yankah, who is also the President of the Central University College, said “this new development suggests a diminishing recognition by government of the critical role played by private universities in any programme of sustainable development and poverty reduction and deepens our conviction that there is growing discrimination and a lack of equity in accessing state funding and amenities by universities in Ghana.”

It said CHPUG considered the withdrawal of the tax exempt status of private universities as a sad development in the history of private education.

It added that the withdrawal might also lead to a desperate search for alternative revenue sources by private universities, which could adversely affect tuition fees.

“We, therefore, call on the government to restore the tax-exempt status of private universities to enable this critical sector to discharge its responsibilities in the national interest,” it stressed.

When reached for her comments, Education Minister Professor Jane Naana Opoku-Agyemang, according to the Daily Graphic, said “I have neither seen the statement nor have been engaged in a discussion on the subject”.

The statement said private universities had over the years been denied access to the GETFund, state scholarships, bursaries for staff capacity building, and state funding for research even where programmes for which the facilities were meant were considered key in the nation’s scheme of priorities.

“It was thus predictable that private universities were totally ignored when the government recently gave subsidies to universities to expand infrastructure to cope with the large intake of students expected this year. Beneficiary universities here were exclusively the state-owned universities, leaving private universities to their fate,” the statement said.

Education was a public good, it continued and laid a critical foundation in any process of development by producing the critical mass of human capital needed in the effort.

The statement advised that private universities in Ghana should be considered an infant knowledge industry that needed state support to grow, and pointed out that a typical private university in Ghana was just about 10 years old, and still struggled to survive in a sector that was capital intensive.

It described the timing of the policy as unfortunate as the country had reached a crucial point in its history where the private sector in education was crucially needed to mop up student overflows from two streams of senior high school applicants.

“Any state policy that ends up weakening private universities could have adverse social consequences: it would further reduce the percentage of high school students that gain access to university education; and could throw into the streets thousands of SHS graduates who cannot be absorbed by the public sector.

"But it can also trigger staff downsizing and staff lay-offs which could worsen the unemployment situation in the country,” the statement added.