SYRIZA reverses its own decision, asks caretaker govt to suspend VAT hike on private education

Furor continues over 23% VAT imposed on private education via SYRIZA memorandum

A furor over a 23-percent VAT rate slapped on private school and colleges’ tuition fees raged on Tuesday, with the opposition pointing directly to class-based “ideological insistence” by leftist SYRIZA to include the measure in bailout-mandated tax hikes. However, a “political somersault” occurred in the evening, with SYRIZA officially asking the caretaker Greek government to …suspend the measure!

Moreover, the leftist party disputed the version of events set out earlier in the day by the EU Commission, saying the institutions (the troika of institutional creditors) forced the VAT imposition on private education.

In a hastily issued announcement, the party also promised to abolish the measure under a new SYRIZA government led by Alexis Tsipras, and adds:

“The VAT increase in the private education sector was due to the insistence of the Institutions. The specific increase was (also) ratified on July 15 by (then main opposition) New Democracy, which now pretends it just realized this … Following a statement by the Commission that it did not require a VAT increase in education, we ask the caretaker government to suspend the measure.”

Hours earlier, the EU Commission left the previous SYRIZA government “hanging in the wind” over the issue, saying it never received a request by the Tsipras government to exclude private education from the astronomical 23 percent rate. Higher VAT rates were amongst the most painful measures included in the third memorandum negotiated, signed and delivered to Parliament for ratification by the SYRIZA-AN.EL coalition government.

European Commission spokesperson Annika Breidthardt, speaking at a regular press briefing, said the Commission was aware of the previous Tsipras government’s imposition of the high VAT rate on private education, adding however, that this was not demanded by the Commission or included in the memorandum.

A sharp backlash against imposing the higher rate on the private sector education emerged in recent days, with confusion over whether or not the measure would be suspended, at least until the Sept. 20 election.

Representatives of private schools, tutorial and foreign language institutes as well as tertiary private colleges have taken their case to the Commission itself, complaining that the measure contravenes Community law.

In an even sharper tone, conservative New Democracy (ND) leader Evangelos Meimarakis on Tuesday charged that seven-month prime minister Alexis Tsipras himself refused to exclude higher VAT from private sector education, intentionally leaving the prospect of a two-month suspension ambivalent. Meimarakis also pointed to a Community directive against VAT in the sector.

Other opposition cadres maintained that the measure was”part and parcel” of radical leftist SYRIZA’s “ideological war” on those it considers as “haves”, i.e. anyone choosing a private for-profit school for their child.

On the other end of the political spectrum, SYRIZA MEP Dimitris Papadimoulis appeared on for-profit Twitter on Tuesday to opine that the measure is not against Community law. “ND reacts because it prefers the over-taxation of the weakest”.