Kwesi Pratt backs plans to tax private universities

Managing Editor of the Insight newspaper, Kwesi Pratt Jnr, has backed government's decision to impose a 25% corporate tax on private universities.

He said the tax was justified to the extent that it is going to be charged on profits made by the universities.

Reacting to calls on government to exempt private universities from paying the levy, Kwesi Pratt said the idea formed part of government's efforts to widen the tax net. He was speaking on Badwam on Adom TV Monday July 22, 2013.

According to the social commentator, although private schools are playing a critical role in improving the country's educational sector, Ghana's economy is in dire need of their support in terms of taxes.

Until recently, private universities in Ghana were exempted from the payment of corporate tax in accordance with Section 10 (1d) of the Internal Revenue Act.

The Act exempts “income accruing to or derived by an exempt organisation other than income from business”. Section 94 of Act 592 defined exempt organisation as “religious, charitable or educational institution of a public character”.

However, the Internal Revenue Act (Act 592) was amended by Act 859 in May this year, with the aim of bringing private universities into the tax net.

But the development, according to the Conference of Heads of Private Universities in Ghana (CHPUG), is detrimental to students of private universities.

Mr. Kwesi Pratt disagreed with them, maintaining that the private universities must not complain because they won't have to pay if they don't make profits.

He is certain that the private universities make a lot of profits because of the huge fees they charge and must be made to pay the corporate tax.

According to him, the fees charged by private universities are so high that he wonders how parents are able to pay.

But Mr Amankwa Assiamah, MP for Fanteakwa North, who was also a panelist on the programme disagreed with Mr Pratt.

He said the profits the private universities make assist in their capacity building and infrastructural expansion.

But Mr Pratt retorted that government equally needs tax revenues to expand infrastructure in the public universities across the country.

There are currently 63 private colleges and universities, admitting 26 per cent of students who enter universities every year.

In the 2011/2012 academic year, the private universities had an enrolment figure of 50,000 students.