NEWS

Private schools urge U-turn on VAT

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More than 100,000 people have signed a petition calling on the government to abandon its plans to slap a 23 percent value-added tax rate on private education in Greece, which until now had no VAT at all.

The petition was created by the Association of Private Schools, which has written to the government urging it to withdraw the measure, which was agreed as part of the fiscal adjustment included in the country’s third bailout.

In the letter, the school argued that after suffering the effects of capital controls, parents may be forced to remove their children from private schools if 23 percent VAT is added to the tuition feeds. The levy will also apply to cramming schools but not to institutions that are registered as nonprofit organizations.

The association also points out in its missive that the parents of some 80,000 children at private schools continue to pay taxes to fund state schools and help the national budget by saving the government from having to use taxpayers’ money for their education.

Kathimerini understands that the proposal for 23 percent VAT to be added to private schooling was proposed by the Greek government and not its lenders. The measure is projected to raise 168 million euros this year and 240 million in 2016. However, the negative reaction to the tax, which does not exist in any other European Union country, has prompted the government to review its decision.

Sources said that the coalition has suggested making households who pay for school fees eligible for tax rebates. The schools have proposed VAT being added only to extracurricular activities.