Parents are set to dig deeper into their pockets if the government adopts a proposal by the National Treasury to introduce Value Added Tax (VAT) on schools’ extra-curricular activities.
“The exemption from VAT on education that includes all services provided by schools creates unfairness as some services like swimming when offered out of school are VAT-able. To remove this discrimination, there is a need to impose VAT on the additional benefits. In this respect, the government will explore the introduction of VAT on services provided by schools but not directly related to education,” the Treasury noted.
It added that some schools offer activities outside the standard curriculum which over the years have been exempted from VAT and as a result, the institutions have been dictating premium fees which have risen to as much as Ksh3 million a year.
Some of the extra activities usually act as springboards into careers such as music or sports while others teach new technologies.
If the proposals are implemented, the already premium charged fees are likely to shoot meaning parents will have to dig deeper in their pockets to pay the amounts despite a fee increment of up to 25 per cent in some schools in years after the Covid-19 pandemic; with the rise being partly attributed to price adjustments due to inflation.
While all education services have been exempt from VAT, the Treasury says the benefit of exemption has not been uniform due to varying school fees and services.
“Education services in Kenya are exempt from VAT to make education accessible to all learners. However, the benefit of the exemption is not uniform across all learners due to differences in fees charged and services provided,” the National Treasury noted.
According to an analysis by the International Schools Database presented in April this year, Nairobi is home to the highest fees for elite schools on the continent with fees reaching highs of Ksh4.5 million (est. $31,000) per year.
Nairobi has maintained this position since 2019 when the International Schools Database first carried out the research.
By Vostine Ratemo
Get more stories from our website: Education News
To write to us or offer feedback, you can reach us at: editor@educationnews.co.ke
You can also follow our social media pages on Twitter: Education News KE and Facebook: Education News Newspaper for timely updates.
