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Threat of commercialization of education lurks behind proposed VAT scheme
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An Indonesian Red Cross (PMI) officer in Central Jakarta sprays disinfectant in a school in Jakarta on March 3, 2020. (JP/Dhoni Setiawan)
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ducation services offered by private educational institutions will soon become subject to value-added tax (VAT) in the latest government tax plan, fueling concerns that it will increase the cost of education for those without access to state schools while putting the burden on private providers.
A draft revision to the 1983 law on general tax provisions and procedures removes educational services from the list of those exempt from VAT, as part of this year’s National Legislation Program (Prolegnas).
Tri Wahyuningsih, a 51-year-old owner of a private vocational school in Surakarta, Central Java is one of many who disagree with the government’s tax proposal. Her school is facing the possibility of being taxed.
“All the funding we have received, be it from donors [or] the public, we put it back in for the good of the public, to manage the school, to build the school and for the needs of the students. Nothing is taken for profit,” Tri told The Jakarta Post on Friday.
Tri said that, in fact, “the government should be thankful for what has been done by the private [institutions] in building the country [through education] together.”
Read also: Govt, House move closer to talks on new tax law
Now with the threat of VAT looming, Tri warned that the tax policy would only become an additional burden for parents who were not able to send their children to a state school. She feared that school dropouts might increase.
