Government may keep VAT on private education despite pledge to scrap it

Government may keep VAT on private education despite pledge to scrap it

It looks like the government will not be able to live up to its election pledge of scrapping plans to impose a 23 percent value-added tax rate on private education, which had no sales tax at all until now.

Education Minister Nikos Filis refused to rule out the introduction of the tax on Tuesday even though his party, SYRIZA, had promised during the election campaign that it would repeal the measure, which it had agreed with Greece’s lenders during negotiations on the third bailout in August.

“It is an issue that relates to the wider economic policy,” he said when questioned about the levy. “We will do whatever we can so workers’ and families’ budgets are not burdened.”

Kathimerini understands that the government is looking at three alternatives to the imposition of the tax, which could raise a potential 350 million euros this year and next. The first option is for VAT not to be imposed on tuition schools (“frontistiria”) but all other forms of private education, including vocational colleges and music schools.

A second option is to reduce the planned rate of 23 percent to the lowest rate of 6 percent, or something in between. Lastly, the government may choose to apply the levy on extracurricular activities organized by private schools and not on regular classes.

“I continue to believe Alexis Tsipras’s election pledge that the VAT will be scrapped and I do not want to believe that all that was a lie so they could steal the Greek people’s vote,” Babis Kyrailidis, the head of the private school owners’ association, told Kathimerini.

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