Finance Minister AMA Muhith on Thursday proposed to bring private educational institutions under VAT net which will, in effect, make private education costlier.

Muhith made the proposal in the budget for the fiscal year 2015-16 in order to impose VAT, make changes to VAT rates and to increase the VAT net.

‘Although VAT at a truncated rate of 7.5 percent is currently levied on English Medium School; the Private Universities, Private Medical Colleges and Private Engineering Colleges are still beyond the boundary of the VAT net.’ the minister said.

So he proposed to bring these sectors under VAT net as well. However, in order to keep the tax burden at a rational level, Muhith proposed to impose VAT at the truncated rate of 10 percent on these sectors.

He also proposed to allow beautification course related training activity to be included within the definition of the “Coaching Centre” service and hence make it subject to VAT.