Permanent secretary for education Suthasri Wongsamarn will hold talks with the Finance and Commerce ministries about taxing highly profitable tutorial schools.
Chem-Ou Tutoring Institute - Pure Chem Centre , a chemistry tutorial school, is very popular among Thai students. (Bangkok Post photo)
The cabinet told the Education Ministry on Tuesday to come up with tax measures in 30 days following a suggestion by the National Anti-Corruption Commission that the schools be subject to tax.
Tutorial schools are exempt from tax under the 2007 Private Education Act which considers them as non-formal schools and not business entities.
However, Section 125 of the act says the collection of tuition and other fees by the schools should not result in unreasonably high profits.
It also says tutorial school profit margins must not exceed 20% of their operating costs a year.
"If tutorial schools have made unreasonable gains and focused more on making profit than on academic results, then they should be taxed. But we will make sure that if we tax them, the schools will not pass the financial burden on to parents,'' she said.
Ms Suthasri said she would seek a balance between business and education development in talks with the ministries and any change to the law must take account of the economic situation.
In 2010, tutorial schools made a total income of about 20 billion baht and have expanded their services in the provinces.
On average, tuition fees range from 3,000-5,500 baht per year and each student studies an average of five courses.
Tanate Ua-aphithorn, a founder and director of Enconcept E-Academy, an English language school, said not all schools are successful, because competition is high.
"Those who have invested millions in developing teaching and learning innovations for educational advancement, should they be required to pay tax?'' he asked.
"If the government intends to tax the schools, tutorial schools should be asked to join the talks with the ministries,'' he said.
Anusorn Siwakul, one of the founders of Ajarn Ou's chemistry tutorial school, said his tuition fees are based on Office of the Private Education Commission regulations.
"Many schools have closed in recent years due to an economic slowdown," he said.