ECONOMYNEXT – Sri Lanka’s book industry has called for a reversal of the value added tax on books, which they warned will make knowledge unaffordable to many and the island may also be in violation of a UNESCO convention on educational materials and books.
Under an International Monetary Fund program to boost revenues rather than cutting spending, called ‘revenue based fiscal consolidation’ Sri Lanka has to raise taxes and reduce exemptions.
The country ran into external default after macro-economist engaged in extreme policy involving and tax rate cuts, after two currency crises from previous money printing to target ‘potential output’, ended up reducing growth.
Associations representing local publishers, printers, booksellers and importers and writers and academics are protesting the tax on books.
“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…,” the General Secretary of the Sri Lanka Book Publishers Association (SLBPA) Dinesh Kulatunga told reporters.
“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.
He was speaking at a news conference where Sri Lanka Book Importers and Exporters Association, the Sri Lanka Writers Association and academics participated.
They charged that Sri Lanka was in violation of the UNESCO Florence Agreement of 1950, to which the country was a signatory.
The 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 Samantha Indeewara said.
Industry officials say the industry already pays around a billion rupees or more in taxes on imported raw materials.
The International Publishers Association (IPA) and the European and International Booksellers Federation (EIBF) has written President Ranil Wickremesinghe to voice their objections, they said.
Extracts from UNESCO Florence Agreement
The Contracting States,
Considering that the free exchange of ideas and knowledge and, in general, the widest possible dissemination of the diverse forms of self-expression used by civilizations are vitally important both for intellectual progress and international understanding, and consequently for the maintenance of world peace;
Considering that this interchange is accomplished primarily by means of books, publications and educational, scientific and cultural materials;
Considering that the Constitution of the United Nations Educational, Scientific and Cultural Organization urges co-operation between nations in all branches of intellectual activity, including “the exchange of publications, objects of artistic and scientific interest and other materials of information” and provides further that the Organization shall “collaborate in the work of advancing the mutual knowledge and understanding of peoples, through all means of mass communication and to that end recommend such international agreements as may be necessary to promote the free flow of ideas by word and image” ;
Recognize that these aims will be effectively furthered by an international agreement facilitating the free flow of books, publications and educational, scientific and cultural materials; and