Posted by: nuweiba | May 7, 2008

Schools to contest new taxes in court

CAIRO: The Association of Private Schools in Egypt are filing a law suit against the new bill that removed tax breaks on private schools and educational institutions, saying it is “unconstitutional.”

Farouk El Emry, treasurer of the association, told Daily News Egypt that law suit will be filed next week.

The new tax structure, approved by the People’s Assembly, removes the tax break on private schools and educational institutions, subjecting them to the 20 percent annual income tax.

“This is disastrous for  parents and schools,” said El Emry.

“We already had a 7 percent pay increase in January and then the recent 30 percent so where can we get this 20 percent income tax, where are we going to get that kind of money when the academic year is almost over,” he said explaining that schools have already collected tuition fees in September.

As they will start paying income taxes, private schools will be under the authority of Chamber of Commerce instead of the Ministry of Education.

“It is now a business not a school. The Ministry of Education will simply be a supervisor,” said El Emry.

There are five types of private schools in Egypt: international schools; Anglican schools affiliated with churches; language schools; ordinary schools; and schools that are affiliated with national education institutions, according to El Emry. 

All of them have benefited from tax breaks except for international schools, which include the likes of the British International School in Cairo (BISC).

“There is a criterion for private schools which can enjoy the tax break and international schools don’t fill this criterion so we will not be affected by the bill in any way,” said Alaa El Dessouky, head of financials at El Hayat International Academy.

The bill comes at a crucial time of the year, when the ongoing final exams top the schools’ priorities.  “It happened so suddenly, so we still haven’t had time to set a plan on how we’re handling the new tax payment. However it can never be applied on the current academic year, it has to be implemented as of the day it was issued,” said Rania Dahab, head of the accounting office at Futures Language Schools.

Three private schools, Lycee Al Horreya, Sacred Heart and College Des Freres refused to comment citing their busy schedule supervising the exams taking place on school grounds.

Private education in Egypt has been growing as people are increasingly demanding certificates other than the Thanaweyya Amma, the national secondary certificate.

Students in private schools are not necessarily the upper class and elite members of society. Parents in the middle class refuse to send their children to the crowded classrooms of public schools. Instead, they choose private schools which give an education that will make students stand out in a market characterized by unemployment and under-qualified cadres.

 

By Safaa Abdoun
First Published: May 6, 2008

 

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