What will be the impact of the new Pension Law on private education in Venezuela?

What will be the impact of the new Pension Law on private education in Venezuela?

A few weeks before the start of the new 2024-2025 school year in Venezuela it is estimated that there will be a reduction in the enrollment of private schools not subsidized by the State.This a direct consequence of the increase in monthly payments to comply with the payment of the new tax destined for the “Law of Protection of Social Security Pensions”.

By Luz Dary Depablos / Correspondent lapatilla.1eye.us





“Logically, it (the payment of the tax for pensions) will have an impact on the cost of the monthly payment of more or less 7%,” said Guerrino Guariento, president of the National Association of Private Education Institutions (Andiep).

He considers this to be “a crazy measure.” In his opinion, the collection of this tax from private institutions that are guaranteeing quality education in the country, “has no legal basis.”

He emphasized that at the request of the parents and representatives themselves, they asked the authorities of the Ministry of Education to repeal this measure that affects private schools because of the impact it represents, but to date there has been no response and since last month they were forced to begin paying the aforementioned tax.

“Obviously, it is an additional cost for families, especially for those who have children in non-subsidized schools, because subsidized schools are covered by the Ministry of Education,” stressed the president of Andiep.

He said that it is unconstitutional in all aspects, “there has been a request to exonerate this payment, which should be the sole responsibility of the Government.”

Public education in decline

It should be noted that the authorities of the private schools are waiting for the registration process for the new school year, in order to evaluate and collect data from the 4,000 private schools and thus determine how many will remain active or how many would have to make adjustments due to low enrollment.

“We are the only country in Latin America that has the subsidized school modality, the State pays these schools that difference (the new tax). They will not suffer as much impact, and thus must have their full quotas, but the teachers’ salaries are very low and they are migrating to non-subsidized schools, because the salaries are much better,” said Guariento.

He said that by the end of the 2023-2024 school year, the schools managed to reach a “conciliation agreement” with a large part of parents and representatives, who understood the situation, while others made the decision to take their children to subsidized schools or other public education institutions.

Guariento also recalled that “public education is not working as it should, there are practically only two days of classes (a week), because salaries are very low, despite the fact that an increase has been proposed, it is not enough, even for basic food.”

He also highlighted the shortage of teachers in the country, because these professionals have migrated to other countries or simply to other jobs, in order to better their incomes.

He regretted that at present universities have few candidates in the area of education for the replacement “because none want to study or train as educators due to low salaries.”

“It is worrying for primary and preschool children, because they could be left without teachers in the medium term if corrections are not made,” he added.

Companies under stress

On the other hand, Ildemaro Pacheco, executive director of the Chamber of Commerce and Industry of the state of Táchira, pointed out that “the appearance of this new tax generates conflict and dissatisfaction. This is something absolutely natural, when we have an active subject who increasingly needs and is interested in earning more and a passive subject, who does not like paying taxes, this is a normal controversy in all countries of the world.”

He explained that in the case of Venezuela, “particularly we are being presented with two situations. On the one hand, an economy that has shrunk, a Gross Domestic Product (GDP) that is lower than that of many years ago, therefore, the profit margins have been reduced for many reasons.”

He also highlighted that the high tax burden, “in fact one of the highest in Latin America, the sum of these two elements makes it not a simple matter for companies to apply or comply with a new tax.”

Finally, he recommended that “far from creating higher taxes, a comprehensive tax reform be carried out to adapt taxation to Venezuelan realities and to increase the taxpayer base, that is, to identify those who are not under the law and do not make contributions to the State.”