CAIRO: The Association of Private Schools in Egypt is currently negotiating the new tax structure imposed on private schools and educational institutions with the Tax Authority and the Ministry of Education, instead of filing a lawsuit as they originally planned.
The new tax structure, approved by the People’s Assembly (PA), removes the tax exemption on private schools and educational institutions, subjecting them to the 20 percent annual income tax.
The parties are discussing whether educational institutions will be under the authority of the Ministry of Finance – which will make the Ministry of Education only a supervisor – or the Ministry of Education, which will then collect the taxes and pass it on to the Tax Authority, according to Farouk El Emry, treasurer of the Association for Private Schools in Egypt.
“It’s definitely better for us to be under the authority of the Ministry of Education because it is a hassle for any organization to have to report to two separate entities, he explained.
The Association of Private Schools in Egypt was scheduled to negotiate a deal with the Tax Authority yesterday but the authority postponed the meeting.
“We are trying to resolve the issue using peaceful measures but if it gets us nowhere, we’ll be forced to take the matter into court. We’ll file a lawsuit at the Higher Supreme Court that this law is unconstitutional, said El Emry.
The association argues that being subjected to an income tax when all expenses, salaries and tuition fees are set by the Ministry of Education is “unconstitutional.
“The ministers have set this law assuming that all private schools are like the international schools, which charge students around LE 40,000 per academic year. They don’t know that 95 percent of private schools have tuition fees in the range of LE 400 to 1,500, said El Emry.
The education committee at the PA received a request to investigate the removal of tax exemptions from private schools and educational institutions.
The request, filed by MP and member of the Private Schools Association Mamdouh Hosny, will be discussed next Sunday.
The request argues that the new tax structure will have a negative effect on the community as around 95 percent of private schools are catered for the lower middle class, with tuition fees around LE 1,000.
They say it offers this socioeconomic class a better education at a price they can afford.
This will be the first time the committee discusses the issue since the decision was taken on May 5.
“Our objective in the upcoming period is to evaluate and study the effects of these new laws on education in Egypt, whether they are beneficial or damaging to the system and whether they are hurting the lower classes and if they need to be amended in the future, said Sherif Omar, head of the education committee at the PA.