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Education tax 'revoked', but private schools will pay under different category

A day after private and boarding school owners agreed to pay Education Service Tax (EST) under another tax category; the government has decided to revoke its earlier decision to impose it.

The Maoist-led government reached to the decision to this effect after inking a 14 point agreement with Private and Boarding School Organisation of Nepal (PABSON) and another parallel organisation of private schools Wednesday.

In the agreement the government, relenting to the pressure from private schools, agreed to remove the 5 percent EST it intended to impose on the schools.

But from now on private and boarding schools will have to pay 5 percent of the annual fees to the government under the title Education Development Support Fund. They have to pay the tax while filling up final examination forms of classes 8 and 10 and above.

On the eve of the School Leaving Examination Tuesday, private and boarding school owners agreed to pay EST, after the government agreed to their proposal to change the name of the tax to Education Development Support Fund (EDSF).

Saying that it is arbitrary and will be a serious setback to running their institutions smoothly, the private and boarding school owners had for the past some time protesting the government's decision to impose EST and had been asking for its removal.

The government had introduced EST in this year's budget to ensure education for children from marginalized and poor communities of Karnali region. nepalnews.com ag Mar 25 09