Students protest against tax on education

Student NGO the Young Socialists held a protest rally against the new Tax Code in front of the Parliament of Georgia on June 28. The new code will impose VAT on state and private universities and private, music and sports schools.

“The main reason for today’s meeting is the planned changes in the Tax Code. Most of the articles in the document are inadmissible for us, but we would like to highlight those concerning the education system. The changes in the code initiated by the Governemt will promote the entertainment business by imposing VAT on the education, culture and arts sectors,” Giorgi Kanchaveli, Head of the NGO, told The Messenger.

Kanchaveli stressed that education is a social field which needs more state subsidy, not less, as students should be given benefits so they can create the future of the country. “We, the Young Socialists, and the whole Georgian student population think education shouldn’t be taxed but be among the top priorities of our country. So we would like to appeal to the Government of Georgia to at least give us specific reasons for their decision,” Kanchaveli said.

Maka Sulakadze, coordinator of the NGO, said that the rally would encourage more students to express their views on the changes in the Tax Code. She told The Messenger that the meeting had been informative for students, which have a right to express their opinions on this issue. “The Government of Georgia announced the planned changes when the academic year was over so that students would not know about them, as they would be outside the capital. It is not fair that casinos, totalisators and such other institutions should be freed from tax at the expense of students. Taxes are already so high in our country that young people shouldn’t be obliged to pay VAT,” Sulakvadze said, adding that the NGO would continue cooperating with all those interested in this issue and make further decisions.

Shalva Kobulashvili, Political Secretary of Young Socialists, said that the new Tax Code had been discussed in Parliament and the students were appealing to the MPs not to adopt the specified changes. “If Parliament votes for the new Tax Code, this will have an immediate effect on educational fees, which are already high. It is alarming that education is being treated like business. It just highlights that the initiative is designed to gain the Government more financial resources from the state and private sectors which it will waste on unknown projects,” Kobulashvili said, stressing that the imposition of VAT will affect fees without improving the quality of studies. “The fees at private universities are already so high that they can’t be compared with those in the state sector. Additional fees will only promote an unhealthy competitive environment between the state and private universities,” he added.

Minister of Education and Science Dimitri Shashkin has offered to the Ministry of Finance and university authorities an endownment project initiative. Endowment projects, which are very common in the US and most European countries, involve giving each university its own fund portfolio, whose dividends are used for particular purposes. “We [the Ministry] have a particular proposal (endownment funds) which will meet the needs of all interested sides and will simultaneously protect students’ rights”, said the Minister, stressing that if the heads of universities approve of this idea it will be sent to Parliament for further discussion.

During the day of the protest however it became clear that the Government had withdrawn the offending article and VAT will not be applied to educational institutions. “No VAT will be imposed on schools and universities. We have been holding continuous negotiations with the public and these have revealed that the Government’s attempt to create a balance between different sectors would have resulted in a deterioration of the quality of education. So let’s abandon promoting other sectors at education's expense,” Kakha Baindurashvili, the Minister of Finance, told the media. Kakha Tsiskarishvili, MP from the ruling United National Movement, called the new Tax Code "revolutionary" as it fundamentally reforms the system, but stressed that consultation between different interested parties is still going on.