Govt decision to scrap VAT on certain books queried
Annastashya Emmanuelle, The Jakarta Post, Jakarta
Businessmen in the book publishing industry questioned on Tuesday the government's decision to scrap the 10 percent value- added tax (VAT) on books in three categories -- education, religion and holy books -- as of March 1, 2002
The owner of the Metafor publishing company, Richard Oh, asked why the tax exemption was granted only on these three categories alone, since books of all types were educational in nature.
"Literature and novels, for example, also consist of educational material. Why aren't they also exempted from tax?" Richard, who is also the owner of QB World Books, asked.
It would be wise for the government to scrap the tax on all books in a bid to help encourage the reading habit among local people, he said.
Arselan Harahap, chairman of the Indonesian Publishers' Association (IKAPI), said on Monday that the tax exemption on the distribution of imported and domestically published books belonging to the three categories affected would reduce the price of books only by an average of four percent.
He urged the government to get rid of the hefty taxes beleaguering the country's publishing industry so as to enable it to produce a much greater number of affordable books.
A representative of one of the country's largest publishing companies, Kepustakaan Populer Gramedia (KPG), said he hailed the government's decision, but was unsure about its implementation.
KPG's editorial manager Pax Benedanto said he had yet to receive any notification about the new policy.
"I've just learned about the decision," said Pax, adding that he was uncertain which books were classified as educational books as KPG considered most of its products to be educational reading materials.
Commenting on the impact of the 10-percent VAT exemption, Pax said that the purchasing power of Indonesian people was not directly related to their interest in reading.
"Reading also depends on family culture, habits and whether one finds a book readable or not," he said.