Imported books to be tax exempt permanently

MANILA, Philippines - The Department of Finance (DOF) is preparing a new order that would effectively make the interim tax-exempt status given to imported books permanent, Finance Undersecretary Estela Sales said.

 Sales told a Senate hearing last week that the DOF is already completing consultations with various stakeholders in preparation for the issuance of the new order.

She said that the tax exemption on books entering the country is currently done on “per shipment basis.”

Furthermore, she said the Tariffs and Customs code “allows exemptions.”

The DOF earlier issued Department Order (DO) 17-09 which imposed a one percent duty on imported educational, technical, scientific, historical and cultural books and a five percent tariff on other book classifications to be used for profit.

The issuance also imposes a five percent tariff on “books or raw materials not to be used for book publishing and its related activities.”

However, books and publications not for sale, barter or hire and those that do not exceed 10 copies of any work when imported by an institution and two copies when imported by an individual will remain duty-free, according to the Finance department order.

Importers must prove that the books to be imported would be used for non-profit purposes to be exempted from the payment of duties.

The order, which was released last March 24, has been greeted by protests from members of the academe, bookstores and other organizations particularly the United Nations Educational Scientific and Cultural Organization (Unesco).

Because of the protests, Finance Secretary Margarito Teves had to suspend the order.

Customs Commissioner Napoleon Morales, for his part, said the one percent tax on imported books was not really to boost revenues as these only reached P1.7 million.

Unesco has said the tax scheme has an inherent anti-poor bias as it is the marginalized sectors that will be most adversely affected by more expensive publications.