New Zealand universities face a compulsory levy on their revenue from international students.

The levy, which is likely to be introduced next year despite opposition, will see institutions pay 0.5 per cent, later rising to 1 per cent, of their international student revenue.

Universities, which said the cost would be passed on to students, have called the levy ill-defined, inequitable and unnecessary.

The government will use the receipts to support export education initiatives such as marketing, quality assurance and scholarships.

51³Ô¹Ï

The export education sector has grown rapidly in New Zealand. Student numbers have doubled since 1998, and the industry contributes about NZ$1.1 billion (£350 million) to the economy, including NZ$400 million in tuition fees.

Steve Maharey, the minister responsible for tertiary education, said the levy would be used to build on New Zealand's strong reputation as a provider of quality education.

51³Ô¹Ï

The New Zealand Vice-Chancellors Committee is not happy with the levy. It estimates that universities will contribute about NZ$700,000 a year but stand to gain little in return.

"Universities already invest heavily in their own export education programmes and do not wish to direct significant funds towards ill-defined central priorities," the NZVCC said in a submission to a select committee hearing on the levy. The vice-chancellors argued that the costs would be passed on to international students through increased tuition fees and that it would have been simpler to have placed a flat surcharge on student visas, as Australia has done.

As the government already takes NZ$125 million in tax from the sector, the government should fund any initiatives out of general taxation, they said.

Stuart McCutcheon, vice-chancellor of Victoria University of Wellington, described the levy as a "tax on success".

51³Ô¹Ï