Sri Lanka: Publishers, Booksellers Oppose a Book Tax Hike

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The world associations of publishers and booksellers, IPA and EIBF, call on Colombo to cancel a tax hike on Sri Lanka’s imported books.

A Sri Lankan naval officer in a flag ceremony at Galle Face in Colombo, February 14, 2023. Image – Getty iStockphoto: Kenula Pathirathna

By Porter Anderson, Editor-in-Chief | @Porter_Anderson

Pansa: ‘Tariffs Should Not Be Imposed on Books’
As the holiday season caught up with many parts of the world publishing industry, the European and International Booksellers Federation (EIBF) and the International Publishers Association (IPA) issued a joint statement, calling on the government of Sri Lanka not to imposed its planned 18-percent value added tax (VAT) on books.

As an article just out in Colombo’s Sunday Times—referencing the messaging from the IPA and EIBF—points to what it says is a doubling of book prices amid the rupee’s devaluation, the paper quotes Miles Brohier, the immediate past president of the Ceylon Booksellers, Importers, and Exporters Association, saying, “This is a taxation on knowledge.”

As media messaging from the IPA and EIBF indicates, the International Monetary Fund‘s (IMF) presence in the picture is understood to be a factor. The IMF reported on December 12 that it had completed a first review under a 48-month “extended fund facility” with Sri Lanka to provide the country “with access to 254 million rupees [US$337 million] to support its economic policies and reforms.”

The IMF asserted in that mid-December assessment that it had found Sri Lanka’s performance in the restructuring program to be satisfactory, writing, “All but one performance criteria and all but one indicative targets were met at the end of June. Most structural benchmarks due by the end of October [2023] were either met or implemented with delay. Notably, the authorities published the governance diagnostic report, making Sri Lanka the first country in Asia to undergo the IMF governance diagnostic exercise.”

What the IPA and EIBF are relaying, however, is that the hike in VAT on books apparently is something Colombo is undertaking as part of its plan to meet those IMF program requirements.

Paagman: ‘This Can Only Have a Negative Impact’

Reading at Sri Lanka’s 1953 national monument in Colombo, the Independence Memorial Hall, April 6, 2023. Image – Getty iStockphoto: JF Benning

Sri Lanka’s Ceylon Booksellers, Importers, and Exporters Association is a member of the EIBF, while the Sri Lanka Book Publishers Association is one of the IPA’s 101 member-associations seated in 81 nations.  So it is that the IPA and EIBF report coordinating their efforts “to explain the catastrophic consequences” of the 18-percent VAT rate, seemingly with little confidence that they’ve been able to dissuade the Sri Lankan government from hiking its rate.

As Publishing Perspectives readers know, the trend in book taxation in Europe has gone the other and more beneficial way, the European Union’s Economic and Financial Affairs Council, ECOFIN, having determined in December 2021 that member-states could use greater flexibility in setting their VAT rates.

By the spring of 2022, member-states were given the license to drop VAT completely on books and ebooks, setting it at zero percent, if desired.

The Sri Lankan position, then, runs counter to such progress elsewhere in the world and this has prompted IPA and EIBF to write both to Sri Lanka’s government but also to the IMF itself to argue against the proposed 18-percent VAT rate on books.

Karine Pansa

While we acknowledge that certain fiscal policies are necessary in times of financial difficulties,” says IPA president Karine Pansa in a prepared statement, “we do not believe that cultural products, including books, should be subject to such measures.

“Tariffs should not be imposed on books, regardless of format, because of their key role in ensuring the success of education, literacy, and cultural development policies in all countries. Books, whether for adults or children, provide the basis of reading skills, curiosity, comprehension and individual enterprise, all of which contribute to a country’s sustained socio-economic growth.”

Fabian Paagman

And speaking for the EIBF, Fabian Paagman—the federations’s co-president along with Kyra Dreher and Jean-Luc Treutenaere—says, “Replacing an exemption with a significant tariff on imported books will immediately cause Sri Lankan booksellers to reduce or cease imports of books.

“Combined with the high prices of books because of the devaluation of the rupee, this can only have a negative impact by reducing access to books, increasing prices for consumers, and incentivizing piracy to the detriment of domestic publishing.”

EIBF and IPA are reminding Colombo that Sri Lanka is a signatory and a party as a state to the United Nations’s Florence Agreement, implemented in 1952 under the auspices of UNESCO and requiring that nations committing to it “not apply customs duties or other charges on, or in connection with, the importation of books, publications, and documents” because of the obviously critical value of a free flow of cultural expression across borders.

“The removal of books from the list of VAT exemptions,” write the IPA and EIBF, “seems entirely at odds with the country’s commitment under the Florence Agreement.

EIBF and IPA stand in solidarity with their Sri Lankan colleagues,” the two agencies write, “and urge the government to reconsider this measure for the benefit of the Sri Lankan literary landscape.”

Meanwhile, the Sunday Times article out this weekend in Colombo, quotes the Sri Lanka Book Publishers Association predicting that under the new proposal, “Readers will have to pay one-fifth more” for books, something that may make books unaffordable, according to a bookseller, even at the Colombo International Book Fair.

The report, outlining local publishing figures’ predictions of hardship under the proposed tax hike, indicates that industry associations “are now contemplating whether a court case could be filed to delay the imposition of VAT for three months until issues related to it are resolved.”

More from Publishing Perspectives on VAT as it pertains to books and publishing in international markets is here, more on Sri Lanka is here, more on the Asian publishing markets is here, and more on bookselling is here.

Publishing Perspectives is the International Publishers Association’s world media partner.

About the Author

Porter Anderson

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Porter Anderson has been named International Trade Press Journalist of the Year in London Book Fair's International Excellence Awards. He is Editor-in-Chief of Publishing Perspectives. He formerly was Associate Editor for The FutureBook at London's The Bookseller. Anderson was for more than a decade a senior producer and anchor with, CNN International, and CNN USA. As an arts critic (Fellow, National Critics Institute), he was with The Village Voice, the Dallas Times Herald, and the Tampa Tribune, now the Tampa Bay Times. He co-founded The Hot Sheet, a newsletter for authors, which now is owned and operated by Jane Friedman.

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