My column tomorrow will be on Robin Hemley’s latest Dispatch from Manila, as published in Timothy McSweeny’s Internet Tendency. It details the months-long embargo on book importations that resulted from the Bureau of Internal Revenue’s discovering it could reinterpret international treaties with impunity, until booksellers, faced with escalating storage costs, cried uncle and surrendered to the BIR by paying the fees it demanded.
This brings up my past entry, What the?? concerning the long-standing problem any booklovers had with our government -which is, its trying to impose tariffs and duties even though the law grants exemptions to the public and others. A similar series of unfortunate events is recounted by The Curious Couch.
In contrast, blogger-turned member of parliament Jeff Ooi, in a recent entry on income taxes in Malaysia, pointed out the Malaysian government makes book and computer purchases tax-deductible.
The Florence Treaty is also commonly known as the Florence Agreement: see Agreement on the Importation of Educational, Scientific and Cultural Materials, with Annexes A to E and Protocol annexed 1950 as well as Protocol to the Agreement on the Importation of Educational, Scientific or Cultural Materials, with Annexes A to H 1976 Nairobi, 26 November 1976.
The Hemley article makes a small mistake, in that Undersecretary Estela Sales is identified with the Department of Customs; she’s actually with the Department of Finance.
pgenrestories wrote today at 2:21 AM, edited today at 2:33 AM
Okay, here goes.
First of all, Undersecretary Sales and her team at the DOF spent a lot of time studying the rules/laws/regulations involving this matter beforehand, and found that in Sec. 105 of the Tariffs and Customs Codes, there really is a provision for a 1% duty on imported books (“educational, cultural, etc.”) that are for sale and for profit, and she said that the Florence Agreement was addressed here in this specific section. This 1% has been in existence since way long ago, and in fact, has not been implemented for that long a time. After Undersecretary Sales and her team studied all these laws, the results of this was that this regulation should be followed because it is the law, and forthwith published this information on Easter Sunday 2009, with implementation to follow 15 days after Easter Sunday. From what I understood of what she said, there will be no duty only if these imported books are donations to public schools, readers’ groups, etc., that is, if the books imported are not for sale or for profit. This 1% is for, to use her words, “control/monitorinig” of the imported books coming in. She used the example that if a bookseller brings in P100,000.00 worth of books, the duty on this is only P1,000.00. She told me that she would like to also make clear that vat on books is still 0%, no matter what.
Now, if a book or title does not fall under “cultural, educational, etc.”, then that duty goes up to 5%. However, she points out that the DOF is not the one who determines a title’s labeling of whether it is “educational, cultural, etc.” She said that this labeling belongs to other organizations (she mentioned the DepEd and Unesco).
These laws which she and her team researched were brought up in a respectful meeting with various Congressmen. She said that at first, a number of them were against it, but when she explained that this duty has been in existence in law for so long and really has just not been implemented, they agreed to it. She said that if the Congressmen really want to make it 0% duty for all, then they must pass that law first before the DOF can implement it. In other words, the legislative part of the gov’t, Congress, has to pass it into law before the DOF, the executive branch that “executes” these laws, can enforce it. As of now, after all their study, Undersecretary Sales and her team have seen that this duty exists in law, and they are doing their job in enforcing it.
After this meeting with the Congressmen, Undersecretary Sales and her team also met with various booksellers. She said that her meeting with them was cordial, good, and respectful, as she made all these details clear to them. In other words, her meeting with them went well with no untoward incidents, which is why she was surprised at what came out in the Hemley article. Everything was spelled clearly to the booksellers.
I also asked her about books ordered, say, on Amazon, and picked up at the post office. Should that duty be paid there too? She said, “Yes, but only if that hasn’t been included in the original payment.” In other words, check your receipt and your emails of the online transaction. If duties had already been paid via Amazon or whatever online bookseller, then print that receipt/email and bring that proof with you to show that duties have already been paid. If however your receipt/email doesn’t show this duty, then you are obliged to pay for that duty.
She was particularly disturbed at allegations of “corruption”, because she said she is also head of the DOF’s Revenue Integrity Protection Service, and not just the Revenue Operations Group. In other words, if there are problems of corruption, one can always report this to her department. One can get her department’s contact info over at www.dof.gov.ph.
I hope this fairly airs her side of the matter. For my part, I’m grateful to her for giving me, just a regular guy, the time. It was a good, calm, respectful talk. I treated her with respect, and I am so glad that she did so likewise with me. Frankly, I was afraid that her department wouldn’t since I’m just a regular guy, but she gave me all the information I asked for, and answered all my questions cordially. Like I said, she spent long minutes talking to me during both our lunchbreaks, explaining her points and bringing out concrete data of what went on with her study and what she implemented. I’d like to thank her very much for doing so, and for making clear what all this really means. I hope I did the fair thing and aired her side as completely as I could…
First, good news. The word is that the National Book Development Board is as upset about this as we are. I’ll leave it up to the board to come out with a public statement, but it is advised that a calmer climate may help smooth things out before this action becomes irreversible. So, steady vigilance for now, not yet time for the pitchforks.
A few thoughts on the DOF response. International treaties such as the Florence Agreement have the force of law in the Philippines, and are of co-equal status with the Tariff and Customs Code. Congress could not by law repeal commitments made via treaties, you need to withdraw from the treaty. So I disagree with her claim that Congress needs to pass a law amending the TCC to impose the 0% duty on books, that law already exists and is called the Florence Agreement.
Section 105(s) does refer to the Florence Agreement. In my earlier comment, I mentioned that Section 105(s) is not as unequivocal as hoped for, but that ultimately is not a problem. Section 105(s) capitalizes on the title of the Florence Agreement, which refers to “Educational, Scientific and Cultural Materials”, and may give the impression that the exemption from duties only applies to such high-minded reading materials. However, the agreement itself is unequivocal that all printed books are exempt from duties. In any event, it is clear from Section 105(s) that the Bureau of Customs is bound to obey the Florence Agreement, even if the text of the provision itself seemingly pretends that only “educational, cultural and scientific materials” are covered by the agreement.
Readers may be interested in the disputed portions of the Tarrif and Customs Code of 1978, to wit:
s. Economic, technical, vocational, scientific, philosophical, historical, and cultural books and/or publications: Provided, That those which may have already been imported but pending release by the Bureau of Customs at the effectivity of this Decree may still enjoy the privilege herein provided upon certification by the Department of Education, Culture and Sports that such imported books and/or publications are for economic, technical, vocational, scientific, philosophical, historical or cultural purposes or that the same are educational, scientific or cultural materials covered by the International Agreement on Importation of Educational Scientific and Cultural Materials signed by the President of the Philippines on August 2, 1952, or other agreements binding upon the Philippines.
Educational, scientific and cultural materials covered by international agreements or commitments binding upon the Philippine Government so certified by the Department of Education, Culture and Sports.