DOF: Book imports, purchases remain tax-exempt under TRABAHO bill
MANILA, Philippines — Purchase and importation of books will remain tax-exempt under the second tax reform package of the Duterte administration, the Department of Finance said Tuesday.
Early this month, the House of Representatives approved on third and final reading House Bill 8083 known as the “Tax Reform For Attracting Better and High-Quality Opportunities” or TRABAHO bill.
The measure seeks to reduce the current 30 percent CIT rate by 2 percent every two years until it reaches 20 percent in 2029, and rationalize investment tax incentives.
In a statement, Finance Undersecretary Karl Kendrick Chua said the only provision pertaining to the book industry under the TRABAHO bill involves the repeal of the tax provision under Republic Act 8047 or the "Book Publishing Industry Development Act.”
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Chua then explained that the inclusion of the book publishing industry in the tax reform bill’s repeal clauses does not mean that VAT- and duty-free importation of books would be removed.
“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 added.
Under the TRBAHO bill, a Strategic Investments Priority Plan, or SIPP, will be formulated to ensure that only industries that provide positive spillover to the economy, based on cost-benefit analysis, are given incentives.
According to DOF’s Chua, the book publishing industry will be included in the SIPP after “an evaluation process.”
If included in the SIPP, the book industry may enjoy more perks under the proposed single menu of incentives in the Tax Code, like the income tax holiday, special rates and additional deductions, Chua added.
“And in my view, this is among the sectors that has a great chance of being included in the SIPP,” the finance official said.
The Philippine Center of International PEN (Poets & Playwrights, Essayists, Novelists) recently urged the Senate to “reconsider” repealing the tax provision under RA 8047, adding that the government should abide by the provisions of the 1950 Florence Agreement.
Under the United Nations treaty, 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 Florence Agreement on Aug. 7, 1979.
In the same statement, Chua said the Duterte administration “also did not touch” the Philippines’ commitment to the Florence Agreement. — Ian Nicolas Cigaral
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