Monday, May 25, 2009

The Lifting of the 2009 Book Blockade

Trust in a strong enough public outcry to get things done.

The President has ordered her Finance Secretary Margarito Teves to scrap all taxes on imported books. The move comes after a foreign writer noted that the Bureau of Customs was violating the terms of the 1950 Florence Agreement, of which the Philippines is a signatory, by imposing taxes on imported books.

In the first place, the Bureau of Customs had no right in imposing taxes on imported books, no matter what their representatives and supporters may say. If one checks the wording of the Florence Agreement itself, and the accompanying reading guide to understand the basis for the Agreement, then one will have a greater understanding of how utterly wrong our Customs and Finance officials were.

The Agreement itself expressly includes in the list of not-to-be-taxed, among others, books, magazines and periodicals (see Article I, a of the Agreement, and check out Annex A). The Bureau of Customs ignores this, and focuses instead on I, b, which exempts educational, scientific, and cultural materials. But the reading guide notes that "the exemption granted to books is not subject to any qualifications as to their educational, scientific and cultural character," which debunks Finance Undersecretary Espele Sales' assertion that novels aren't educational, as well as corrects a blogger's perception that he doesn't see why books such as Angels and Demons, the Harry Potter series and the Lord of the Rings should receive "preferential import treatment". Actually, it's not preferential treatment, but simply how the Agreement should be implemented.

Of course, there may be a way out for Customs officials. The agreement does note that the state is not prevented from imposing the following charges:

(a) Internal taxes or any other internal charges of any kind, imposed at the time of importation or subsequently, not exceeding those applied directly or indirectly to like domestic products;

(b) Fees and charges, other than customs duties, imposed by governmental authorities on, or in connection with, importation, limited in amount to the approximate cost of the services rendered, and representing neither an indirect protection to domestic products nor a taxation of imports for revenue purposes.

While the reading guide notes that the freest possible application of the Agreement with regard to internal taxes is encouraged, I'm sure our Customs officials will find a way to impose these charges, as they have in the past. The important thing here is to be vigilant about it, if they decide to be sneaky about getting around our international commitments.

For now, however, readers and bloggers can be relieved at the fact that, thanks to our efforts, our highest official was finally reminded of her country's responsibilities to the international community, and that books are now, once more, tax-exempt.

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