Victoria Belous
“Let’s be honest and fair: a private school has an important role to play in education, but at the same time it also carries out an economic activity, generates revenue and can make a profit. I also understand parents’ concerns that this change could lead to higher tuition fees. But the tax is levied on profit, not on the revenue received by the school, nor on the tuition fees paid by parents. Furthermore, there is a very clear option in place until 2029: if the profit is reinvested in the development of the business — in classrooms, equipment, technology, infrastructure or other investments — this profit is not taxed provided that no dividends are withdrawn,” said Victoria Belous.
The Minister maintains that, at the same time, the Government is proposing to maintain tax relief for parents who incur expenses for their children’s education, including for private schooling.
“At the same time, the Government has proposed maintaining tax relief for people who incur expenses for their children’s education, including for private school fees. This is a form of direct support for families and, indirectly, for all forms of education and training, including those provided by the private sector. Therefore, we are not withdrawing support for education. We are maintaining it where it reaches families and children directly, whilst for companies we are establishing fair tax rules,” explained the Minister of Finance.
Belous also mentioned the situation of institutions currently operating as non-profit organisations and announced that the authorities would seek solutions to transition them to legal forms that would allow them to carry out their economic activities transparently.
“For those currently operating as non-commercial organisations, we will seek simple and clear solutions to facilitate their transition, where appropriate, to a business entity — a limited liability company (SRL), a public limited company (SA) or a sole trader — so that they can operate transparently and legally withdraw dividends when they so choose. We do not want to complicate the lives of those working in education, nor do we want to place additional pressure on parents. We want a system in which those who invest in and develop their businesses are encouraged, and the tax rules are clear and equal for everyone running a business,” concluded Victoria Belous.
According to the draft of the new budgetary and fiscal policy, private educational institutions would be required to pay a 12 per cent income tax. The measure is being contested by trade unions and employers’ organisations, which are calling for the tax breaks currently granted to this sector to be retained.
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