Gov’t indicates decision on VAT in private education reached

The government appears to have reached a decision regarding the imposition of value-added tax on private education.

Sources said that officials meeting under the leadership of Prime Minister Alexis Tsipras at Maximos Mansion, had decided to impose a 6 percent VAT on tutoring schools (frontistiria) and a 13 percent VAT on private schools. Nurseries and kindergartens would be excluded from the measure.

Speaking to reporters outside the Maxmos Mansion on Tuesday, Education Minister Nikos Filis said there had been "positive developments" regarding the private education sector and that an official announcement  was imminent.

The government had proposed a 23 percent VAT rate on all private education as part of its agreement with lenders in August. However, following the ensuing backlash from parents, teachers and opposition parties, Tsipras pledged ahead of the September 20 elections to scrap the scheme.

However, the coalition seems to have found it hard to pinpoint alternative fiscal measures to cover the projected revenues from the measure.

Adding 23 percent VAT to private education was expected to bring in some 350 million euros in revenues this year and next.

The government's final plan will need the approval of the country's lenders before it can be implemented.