Books should be freed of value-added tax: Habibie

JAKARTA (JP): President B.J. Habibie concurred on Monday that there should be a halt to the 10 percent tax on books, which publishers complain unnecessarily adds to book prices.

"I quite agree that books should be freed of the value-added tax," he said at the opening of the 14th congress of the Association of Indonesian Publishers (IKAPI) at the State Palace.

Ikapi Chairman Rozali Usman had asked in his opening address that the government lift the tax for almost all types of books, which has long been blamed for their steep prices.

The government only absorbs taxes on schoolbooks and religious works.

The recommendation to end the tax has received backing by legislators in the two preceding five-year terms of the House of Representatives, Rozali said.

"In the Asia Pacific region, it is only our beloved Indonesia which applies a value-added tax on books," Rozali said in his speech.

"The recommendation for no tax on books is also in line with that of the International Publishers Association Geneva and Asia Pacific Publishers Association Tokyo of which Ikapi is a member."

Rozali said books were a basic tool in human resource development.

Habibie said allegations of monopolistic and corrupt practices in the procurement of school textbooks should be thoroughly investigated because it would ultimately harm the country's education program.

The President also pointed out the necessity to create a conducive business atmosphere for the book industry because the sector had a decisive role in the learning-teaching process.

"I have heard some assertions over collusive and monopolistic practices in the procurement of textbooks for schools," the President said.

Minister of Education and Culture Juwono Sudarsono has said his ministry is probing the report. Publishers have complained that those who win bids for the publication of schoolbooks are inevitably well-connected to ministry authorities in charge of schoolbook publications.

"I hope that IKAPI will discuss all the problems," the President remarked.

The government allocated US$172.8 million, including a $132.5 million loan from the World Bank, to finance the procurement of textbooks for junior high schools from 1996 to 2000.

Many complaints have arisen about the quality of the books. The ministry has reportedly decided to withdraw English textbooks for junior high schools due to their low quality.

The private Indonesian Corruption Watch appealed to the World Bank to stop funding for the program until the investigation into problems is completed. (prb)