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Book industry makes clarion call for VAT exemption

  • 05 Feb 2024
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The latest salvo against the government’s imposition of value-added tax (VAT) on hitherto exempted sectors came today from Sri Lanka’s book industry, which has called for an immediate reversal of the decision to tax the sale of books at 18%.

Associations representing local publishers, printers, booksellers and importers and writers and academics came together to voice their opposition to the unavoidable hike in the prices of books consequent to the imposition of VAT, pointing to the pernicious long-term effects it would have on socio-economic development by making access to knowledge unaffordable to many.

"We acknowledge that economic challenges spanning multiple government terms have led to a situation where the broader population has been required to shoulder the financial implications of the gradual national recovery," the General Secretary of the Sri Lanka Book Publishers Association (SLBPA) Mr Dinesh Kulatunga told media at a news conference.

“But is it fair that this short-term requirement to boost government revenue should have the longer-term destructive consequence of retarding the education, culture, intellectual progress and personal development of generations of Sri Lankans, and negatively impact the development of the knowledge economy?” he asked.

Speakers representing different stakeholder groups in the book industry also charged that with the indiscriminate extension of VAT to a highly sensitive and vulnerable sector like books, Sri Lanka was also in violation of the UNESCO Florence Agreement of 1950, to which the country was an early signatory and continues to be a Contracting State.

The UNESCO Florence Agreement is a treaty that binds Contracting States to not impose customs duties and taxes on certain educational, scientific, and cultural materials that are imported.

“With the imposition of VAT on books, Sri Lanka attains the dubious distinction of becoming one of a very few countries that impose a tax on a vital source of knowledge and information,” the President of Sri Lanka Book Publishers Association Mr Samantha Indeewara said. “What this means is that while the rest of the world is trying to make knowledge more accessible and inclusive at the grassroots level, Sri Lanka is trying to use this industry to raise government revenue, heedless of the serious ramifications.”

“It is a text-book case of killing the goose that lays the golden eggs.”

“According to the International Book Publishers Association, books are not a commodity like any other, but are strategic assets that activate the knowledge economy, facilitate upward social mobility as well as personal growth, and bring widespread medium and long term social, cultural and economic benefits.”

It was also pointed out that the industry already contributes upwards of Rs 1 billion to the government’s tax revenue via the VAT paid by importers that supply 90% of the raw materials used in the production of school text books and other books. The imposition of VAT on books therefore results in an anomaly of double taxation for publishers, further aggravating a difficult situation.

The government’s decision to impose 18% VAT on books has already generated concern internationally, with the International Publishers Association (IPA) and the European and International Booksellers Federation (EIBF) writing to President Ranil Wickremesinghe to voice their objections.

“Our member associations are united and have made efforts to engage with your office to explain the catastrophic consequences that such a tariff will have on the country’s book sector,” the two organisations said on 15th December 2023. “We stand in solidarity with Sri Lankan publishers and booksellers, and urge you to reconsider this measure for the benefit of the Sri Lankan literary landscape.”

Among the Sri Lankan organisations and personalities that attended the news conference to call for the restoration of the VAT exemption on books were the Sri Lanka Book Publishers Association (SLBPA), the Sri Lanka Book Importers and Exporters Association, the Sri Lanka Writers Association, and several leading writers, academics, educationists and author-publishers.

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