THE Department of Finance (DOF) has assured the public that the purchase and importation of books will remain tax exempt under the second tax reform package of the Duterte administration.
Finance Undersecretary Karl Kendrick Chua said at a recent news forum that the value-added tax (VAT) exemption of books will remain, as provided under the National Internal Revenue Code, along with its importation, as stated under the Customs Modernization and Tariff Act (CMTA).
Chua also assured the public that the Philippines will continue to abide by the provisions of the Florence Agreement, a 1950 United Nations (UN) treaty in which the signatory-states agreed not to impose customs duties on the importation of certain educational, scientific and cultural materials, including books. The Philippines signed the agreement on Aug. 7, 1979.
The second package of the Duterte administration’s comprehensive tax reform program (CTRP) seeks to reduce the corporate income tax (CIT) rate and reform the convoluted system of incentives given to businesses. Package 2 aims to attract more investments, create more jobs and level the playing field for micro, small and medium enterprises (MSMEs) that are currently unable to compete with multinational companies receiving numerous and hefty tax incentives.
“First, under the tax code, the exemption of the purchase of books, we did not touch that. If you buy a book from a bookstore, it will still be VAT-exempt,” Chua said. “Second, the importation exemption under the Customs Modernization and Tariff Act, we also did not touch that.”
He said the same goes for the Florence Agreement.
Chua said the only provision pertaining to the book industry under House Bill 8083, or the Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) Bill, involves the repeal of the tax provision under Republic Act 8047, or the Book Publishing Industry Development Act, after two years from the effectivity of the law.
He said the inclusion of the book publishing industry in the Trabaho bill’s repeal clauses does not mean that its VAT- and duty-free importation of books will be removed.
“The book publishing industry will be included in the Strategic Investment Priority Plan (SIPP) after an evaluation process. And in my view, this is among the sectors that has a great chance of being included in the SIPP,” Chua said. (PR)