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May 04

The Long View: The great book blockade of 2009

The Long View
The great book blockade of 2009

By Manuel L. Quezon III
Philippine Daily Inquirer
First Posted 04:15:00 05/04/2009


According to Malaysian blogger-turned-parliamentarian Jeff Ooi, if you buy books or computers, the government will allow you to deduct your purchase costs from your income tax. The Malaysian government seems to be of the opinion that buying books and computers are good things; that these good things should be encouraged; and that the benefits of personal purchases that improve knowledge and increase modern skills outweigh any potential loss of revenue to the government.

The policy of our government seems to be the exact opposite: to put the squeeze on citizens in order to add to government coffers depleted by electioneering expenses. Over at McSweeney’s is an entry by Robin Hemley, the director of the University of Iowa’s Nonfiction Writing Program who’s in the Philippines on a Guggenheim Fellowship. In “The Great Book Blockade of 2009,” he details the creativity of Filipino bureaucrats like Customs Undersecretary Espele Sales.

According to Hemley, the situation developed this way. Stephenie Meyer’s novel “Twilight” apparently did so well in the bookstores that the number of copies being imported attracted the attention of a Customs official. Examiner Rene Agulan decreed that duties be paid. It seems that the importer of the book reacted in a manner familiar to most book lovers in the country: to eliminate the hassle, the importer complied with the Customs levy on the title.

Hemley says surrendering to the authorities was a mistake because the Philippines, back in 1952, became a signatory to the Florence Agreement, a United Nations treaty that mandates the tax-free importation of books in order to facilitate the free flow of “educational, scientific, and cultural materials.” The importer’s submission to the whims of Customs whetted the Bureau’s appetite; they put a squeeze on all book importations by air. The result? For two months virtually no imported books entered the country.

Not least because it seems book sellers had the gumption to challenge the government. Enter Undersecretary Espele Sales whose PowerPoint presentation to booksellers Hemley describes as “Orwellian,” because of an essay in which Orwell examined how officials twist words to suit their purposes.

Take the official’s interpretation of the following sentence in RA 8047 (the Book Publishing Industry Development Act): “the tax and duty-free importation of books or raw materials to be used in book publishing.” According to Sales, this lacked a comma after the word “books,” which meant that what was tax and duty-free was only books used for book publishing.

People in the book industry were left scratching their heads, wondering what a “book used in book publishing” is. Customs went further and said it interpreted the Florence Agreement to mean only educational books are tax-free, with Customs deciding whether a title qualifies as being educational or not. Booksellers responded that this went against half a century’s common understanding of the treaty; did this mean everyone had been wrong and Customs suddenly right? Sales replied, “Yes.”

Their books sequestered in warehouses, booksellers trying to comply with red tape found the rules being changed every time they seemed on the verge of getting their documents in order: “Now they were told that all books would be taxed: 1 percent for educational books and 5 percent for non-educational books.” With Customs officials doing the sorting, manually, on a per-volume basis, it seems, tying up inventory as storage fees escalated.

This finally led many booksellers to comply (under protest) with the government’s levying of tariffs. Who says kidnap-for-ransom doesn’t pay?

For years now, Filipinos bringing in books have had to wrestle with Post Office and Customs officials trying to impose tariffs, hoping that citizens would meekly submit to paying duties and fees on books. But back in September 2008, there was an opinion of the Bureau of Internal Revenue that the importation of books for personal use is exempt from value-added tax as well as from the payment of import duties. A small handling fee, is, however, legitimate on the part of the Post Office.

While Republic Acts 8047 and 9337 put in place Value-Added Tax exemptions for imported books, the government seems intent on nullifying those privileges; and citizens and booksellers alike seem headed to being at the mercy of Customs officials pressured to remit to the national government even to the extent of defying international treaties. This is a government policy that has basically declared obtaining knowledge, in any form, as subordinate to fattening the national purse.

But of course this is simply yet another manifestation of a larger trend, which is to deemphasize government’s being in place to serve the citizenry, and instead fortify it’s existing in order to mulct the population: the rule of law being nothing more than systematized extortion, whether one talks of traffic enforcement or books.

As a writer and a partner in a modest book publishing concern, I have a bias for books. But then again, this is, to my mind, a healthy bias and one shared, for example, by countries like Malaysia. You’d think any reasonable government would encourage all forms of reading, as healthy and beneficial to the population. The teenager who reads “Twilight” might just go on to reading the classics or about science; however, at the rate officialdom’s going, it seems content to keep us starved for affordable reading materials. In the land of the blind, the one-eyed man is king?

* * *

YOU can read Robin Hemley’s entry in full at http://www.mcsweeneys.net/links/manila/1dispatch6.html

37 comments

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  1. jeaneth balaba

    i cannot agree more with your commentary on this systematic tax on education. a few months ago, i made my first online hardcopy book purchase, on a whim, at amazon. i was teaching economics in davao and ordered sure enough 1 copy the armchair economist by steven landsburg, 1 copy new ideas from dead economists and a third one i think. i was charged about P3,500 total for the books. i would even see a used copy of one of these books at a booksale outlet and i would rue the order. my order came soon enough thru amazon’s dhl delivery. customs charged dhl P1,700.00 as duties and dhl wanted me to pay them before they release the books to me. so i paid but smarting so for the 50%something tax on something i could buy cheaper at booksale or maybe even national bookstore. compare to my first online purchase of a harvard online article for my mba, and that one went through without the tax.

    i would order later, my last online buy, through amazon the world’s first handheld lcd projector. cost me an arm and a leg. but when it came via usps and i had to go to the post office and show my face to customs. i explained i was teaching, my salary small, it was personal use, and no competing product in the philippines. and that shouldnt that be tax-exempt? sympathetic, he recomputed the duties at 3% not anymore 5% because it said so in the code. but i heaved a little sigh. for educational books, the levy is 50% but for educational gadgets it’s only 5% and negotiable. isn’t there such a thing as no-dollar import? or do you have to be an OFW first to gain the privilege?

  2. raelfelizco

    I couldn’t agree more. By taxing books, it discourages people to read and power up their minds. Maybe this is just another way for the Customs to jack up its collection thereby enjoying the privileges of the Lateral Attrition Law (well we are yet to hear of anybody who has been axed because of poor collection). The taxes on books is being collected with malice and for self-serving ends as if we don’t know to whose pockets and bank accounts it would land.

    In doing so, the government has failed to look into the social benefits foregone by taxing books and bookworms. It discourages private individuals (myself included) to enrich themselves of foreign literature and encourages them to resort to ebook piracy on the Internet.

    It is so narrow and feeble-minded of these people from the Customs to just base their decision merely on Twilight alone since it just comprise a small portion of books imported from other countries. Thus explains the high cost of books, not only of Twilight and Harry Potter genre but also those NCLEX, CGFNS and other reviewers (among many others) being used by professionals who fled the country to work and subsequently send dollars to afloat our economy.

    The good Undersecretary and the entire Bureau of Customs should start rethinking things over taxes and tariffs imposed on books. There are a lot of ways to boost collection other than taxing people who just wanted to learn and enjoy the world of literary magic. Why have some people stopped using their brains?

  3. wolf888

    can they bring that issue to the courts for proper interpretation of the law? if so, they should, to end this nonsense once and for all.

  4. Carl

    While the uproar over taxing books and computers is completely justified, it must be pointed out that this is a symptom of a greater malaise in our system.

    In today’s Inquirer, Cielito Habito reveals that the Philippines and Indonesia are the bottom dwellers in the whole of Asia when it comes to social spending. Malaysia spends the most, as part of GDP, on education, along with Mongolia.

    On health, other countries also set aside respectable sums. Indonesia and the Philippines are also bottom-dwellers.

    It is very clear that the education and health of our people are not high on the list of importance of our leaders and our government.

    It becomes even more grim when you put that into the context of government’s fiscal condition. Just a few days ago, Finance Secretary Margarito Teves lamented that just 3.1 million Filipinos, out of 90 million, pay their individual income taxes. That’s only 3% of Filipinos. A very tiny tax base indeed!

    And the country is facing a whopping P200 billion budget dificit this year, what with tax collections down due to a slowdown in the economy and a very huge drop in fuel tax collections.

    So the BIR is being turned into the shock troops to raise money at all cost. Despite a P66 billion shortfall in tax collections last year, it has been tasked to raise tax collections by more than 11% this year. To do that, the shock troops will have to squeeze blood out of turnips (or camotes).

    The unfortunate choice of priorities that our government and our leaders make is exacerbated by the huge burden of debt that our government carries. In his article, Cielito Habito cites debt-service as the single most onerous burden that prevents the Philippines and Indonesia from investing in human development.

    While on this topic, I wonder how much government taxes those ubiquitous telenovelas imported from Taiwan, South Korea, Japan and Mexico? I have often wondered why those imports have muscled out local daytime soaps. The most logical conclusion is that the imports must be cheaper to air than producing locally-made ones. Is there such a dearth of local talent and creativity or is there something amiss here?

  5. adrian

    and then we wonder why Filipinos do not have much interest in reading books? government officials like Sales sure are retarded…

  6. Paul Garilao

    I read the entry of Robert Hemley. I will actually post a blog about this issue until I saw your article. Thank you for enlightening us about this.

    This issue will open a can of worms. Sana mabigyan ito ng atensyon ng media.

  7. Bert

    The politicians and the top government officials are not to be bothered with books and reading, there’s nothing for them there, they don’t read books anyway.

    They’re busy, in fact too busy, with something else of the more profitable kinds. After all, it’s the future, their future, what is paramount to them, and indeed, as can be glimpsed from their lifestyles, the picking’s great.

    To hell with the rest of us!

  8. Kenneth Yu

    Hi, Manolo. How are you?

    I blogged about this last May 3, 2009, and there have been a whole lot of responses over on my blog. One of the commenters is a lawyer, so he’s been sharing his legal opinion on the matter. I’m going to try and make a call to Undersecretary Sales’ office tomorrow. I hope she or her staff will talk to me, since I’m just a nobody in this matter, but I really want to know what their official stand on this matter is. Here’s the link, in case you’re interested:

    http://pgenrestories.multiply.com/journal/item/815/The_Great_Book_Blockade_of_2009?replies_read=25

    Thanks!

  9. supremo

    mlq3,

    I sent you some books last December through Amazon. Did you pay taxes on them?

  10. mlq3

    supremo, hold on, which books? normally though, no taxes because i challenge every attempt…

  11. mlq3

    kenneth many thanks! will read with interest.

  12. mlq3

    carl, you may want to read the florence agreement, it suggests telenovelas could enter tax-free.

  13. mlq3

    wolf, you’d be up against the solicitor-general and the department of justice, and any business questioning the bir would be subjected to an instant audit, the sort of nightmare scenario few companies can afford to endure. plus court expenses and the risk of losing or only winning after repeated appeals which would wipe out, due to the litigation, whatever margins you enjoy. to my mind, those are the reasons that make a court challenge imprudent.

  14. mlq3

    jeaneth, it seems you may have paid taxes you didn’t have to, on those books; i wrote about it before and yes, government will try to get away with it, hoping citizens are too fearful or ignorant to call their bluff.

  15. supremo

    mlq3,

    I have to check my email about which books were delivered.

  16. supremo

    mlq3,

    Not books but book, Britain and Indian Nationalism: The Imprint of Amibiguity 1929-1942 from Amazon. I was afraid to send the rest because I’m not sure if you will get them. Please check on that. The address used was Quezon City.

  17. mlq3

    YES!!!! I got it!! But package didn’t say from whom!!! THANK YOU!!!!!

  18. UP n grad

    to supremo: You may find useful what I currently do for my college-co-alum in metro-Manila. He identifies books from Amazon; I put the order on my Master Card; Amazon ships books to me. I “toss out” the Amazon paper-receipt and create another one — Seller: TINDERA Books of Dallas, Florida, buyer – me. TINDERA Pricing ??? Miraculously unbelievably low!!! (TINDERA always has a going-out-of-business sale for me with the receipt showing the price I want (always 70% to 90% lower than Amazon))

    I enclose the Tindera-receipt in the package mailed to Marikina. Pinas inspector sees Tindera-pricing.

  19. Carl

    “carl, you may want to read the florence agreement, it suggests telenovelas could enter tax-free.” – mlq

    That clearly shows our priorities. Cultural junk like telenovelas are tax-free, while books are taxed.

    Incidentally, we are an agricultural country which can’t even produce enough food for ourselves. Yet, government imposes high taxes on agricultural inputs. Fertilizers, pesticides and agricultural equipment are taxed, a disincentive to food production. But government needs money so badly, it can’t see beyond its nose.

  20. supremo

    UP n grad,

    That’s clever.

  21. Jhay

    It’s the Bureau of Customs, this isn’t totally a surprising one.

    Mga buwaya talaga ang mga iyan!

  22. mbsp

    I love books so I can’t help chiming in.

    So it may be imprudent for companies to challenge this in the courts, but this flies against the face of a treaty ratified by the Senate. We must have mechanisms for this, don’t we?

  23. mlq3

    Actually fdrom what I’ve seen, we signed on to the treaty in 1979 not 1952, which means it was done during martial law and so no senate ratification took place. And you very well know by now most mechanisms for redress have become fatally compromised.

  24. Kenneth Yu

    Hi, Manolo.

    Believe it or not, I tried, got through, and was able to speak with Undersecretary Estela Sales of the DOF (man, looking back at it, maybe that was a bit foolhardy of me ;)). So, to be fair and to air her side on the matter, I put up what she told me in the comments section of this link:

    http://pgenrestories.multiply.com/journal/item/815

    For your info! And I hope this helps. Thanks!

  25. elmot

    from the point of view of a simple voracious reader, lover of books and frustrated writer, government minimizing taxes or even scrapping taxes on books and other reading materials and sources of knowledge and information would make me sing hallelujah everyday.

    what makes reading not only aversive to most of the youth (who does not have their own money yet) is the expensive tag on it. that is why many of the youth would only content themselves, even force themselves to learn from cheap and error-filled books (deped textbooks of course) to the detriment of nation-building.

    this makes we want to live in malaysia than sweat it out always at booksale :D

  26. mlq3

    kenneth, thanks, took the liberty of reproducing relevant comment in my blog entry.

  27. Gil H. A. Santos (AKA Guillermo H. A. Santos)

    I fully agreed with miq3; this mentality (plain stupidity or just inability to understand English? or ducking behind legal gobbledigook?) of our customs officials, and obviously indifference by members of our national (in both Executive and Legislative branches of) government is leading the entire nation to idiotization. This is further aggravated by the current devotion of the local broadcast networks to telenovelas and infotainments/entertainments (Wowwowie, Deal-No-Deal, The Buzz, Singing Bees, and any tearjerkers–all for ratings!)
    Solution: let’s work on the members of Congress to pass a law exempting all (imported or locally published) books and reading materials from all taxes (after all entities and individuals are charged income taxes). We need to encourage reading books, periodicals, and all available sources of information. Otherwise, the future Filipino can easily be marginalized and mendicant. Gil Santos

  28. manel

    This country is sooooo messed up! It is filled with unethical leaders who’d twist the law just so they could get more money. Argh! No wonder Filipinos are becoming even more apathetic. Tsk. Tsk.

  29. penatbater

    manolo for president! :D (or at least customs head :D) Pero I guess dpt corruption should stop from the top. Its the mentality na “ok lng kay bossing mangurakot, siguro ok rin lng sakin” that deeply bothers me >_>

  30. kerocute

    books are already expensive as it is! imposing taxes on them will on make it worse! This is so pathetic.

  31. Louie Aguinaldo

    If you are on facebook please join the cause FILIPINOS AGAINST THE TAXATION OF BOOKS BY CUSTOMS ——-
    http://apps.facebook.com/causes/280535

    We hope to get popular support and hopefully get the attention of some lawmakers and government officials who are in facebook. Maybe some of them will champion this cause.

  32. Juan Paolo Viloria

    Not to exaggerate, but I hope we don’t end up like Christians in Communist China where bibles have to be smuggled in, just because they have been deemed illegal.

    With these greedy, money grubbing customs cretins in office, some, if not a lot of people might resort to smuggling books in to avoid such exorbitantly ridiculous taxes–not to say that it isn’t already happening.

  33. Nikko

    I hope we can do something about it more than reacting but putting it in place as it should have been in the first place. This is something that affects a bigger majority if not all. Education should in the first place be the most accessible in any country for that matter. This is what will keep us up with the many changes in our society today and the generations to come. The mind that seeks to learn should never be deprived for it may bear fruit that everyone will benefit in the end. We should fight this right as it is everyone’s right to learn, to be better Filipinos.

  34. Marcelo

    What, exactly, is the difference between a tax on imported books and a tax (that’s what tariffs and quota restrictions really are)on imported rice? Both are protectionist devices. Both impose terrific burdens on consumers. Yet the first has our Kommentariat up in arms while the second, in general, is warmly embraced by the same Kommentariat. If one is to be brutally objective, the State can afford to irritate the chattering classes but not the masses. And the State does legitimately need revenue (the Philippines has miserably low collections compared to most of its neighbors). Those collections HAVE to go up, complaints about electioneering, corruption, etc. notwithstanding. (Do you seriously imagine that governments like those of PRC will even blink about taxation as a result of complaints about such revenue leakages?). it’s just easier for the State to get the money from those with money (i.e. most readers) than from those whose anger it cannot afford to face. That’s just about it, I’d say.

  35. mlq3

    the difference, adopting your logic, is that there is no international treaty in which nations have pledged to eliminate tarrifs on rice for the purpose of facilitating the distribution of food, while there is an international treaty where countries have committed to eliminating import duties on books, on the policy principle that facilitating the trade and distribution of books regardless of borders is worth whatever import duties the countries would lose.

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