Bookstore owners seeking VAT meeting with Finance Minister
Say they are now sandwiched between book pirates and VAT
Stabroek News
November 3, 2006
VAT discourse: Local book importers Bholan Budhoo, Ovid Holder and Lloyd Austin meeting to discuss their VAT concerns at the Tower Hotel earlier this week.
Three of the country's leading booksellers who also serve as local agents for regional and European book publishers are seeking a meeting with Finance Minister Ashni Singh in an effort to secure a concession for books imported into Guyana in the light of the impending introduction of Value Added Tax (VAT) in Guyana.
The three bookstore owners, Lloyd Austin of Austin's Bookstore, Ovid Holder of Universal Bookstore and Bholan Boodhoo of Horizon Bookstore met last Monday to assess the likely implications of VAT on the bookselling industry. All three told Stabroek Business that the industry is already facing a serious crisis and could now face further difficulty unless urgent consideration is given to excluding book imports from the new tax.
The decision by the bookstore proprietors to seek to lobby the Minister on the VAT issue emphasizes a pattern of sectoral uneasiness over the implications of the impending introduction of the new tax and marks yet another development in the ongoing engagements between government and the private sector ahead of the January 1 VAT implementation.
Reading material with the exception of magazines is currently imported into Guyana free of duty and the booksellers say that should books be subjected to the 16 per cent VAT from January it could remove what they describe as "the small concession" that has helped keep the industry alive.
The bookstore proprietors say that in recent years the market for schools' text books, regarded as the "bread and butter" of the bookselling industry, has been ravaged by "pirates" offering cheaper reprinted and photocopied versions of original books and that any increase in prices resulting from VAT charges will provide even more encouragement for the "pirates" whom, they say, already control around 40 per cent of the market for text books.
Austin is the agent for the British book publishers Nelson Thorne, and Oxford, Royards of Trinidad and Tobago and Caribbean Longman's of Jamaica. Holder's Universal Bookstore is the agent for MacMillan while Boodhoo's Horizon Bookstore is the representative for Longman's (schools division) and part of Pearson Education, the largest book publisher in the world. The publishers represented by the three booksellers say that the imported publications represent a critical part of the local education curriculum as well as specialized and light reading.
During the meeting at which Stabroek Business was present the booksellers discussed a range of issues pertaining to the future of the local book industry including the continued illegal reprinting and photocopying of text books, the difficulties which they say they are likely to face in meeting the "up front" 16 per cent VAT charge and the likely further decline in book sales in the wake of the introduction of VAT.
In reviewing the current situation in the industry in the light of the reprinting and photocopying of text books Holder said that the practice had negated the existing duty-free concession of book imports and that in the circumstances VAT would only serve as an additional imposition on an industry that was already in crisis. He said that the introduction of VAT from January 1 ought to be preceded by a genuine effort on the part of government to enact effective copyright legislation and to put accompanying policing mechanisms in place to put an end to the illegal reproduction and distribution of text books, a practice which he said had been studiously ignored over the years.
Earlier this week Parliament passed the "sunset legislation" that addresses, among other things, intellectual property associated with the marketing of official souvenirs for Cricket World Cup 2007 and Holder said that it was ironic that while Guyana was moving, correctly, to conform to CWC licensing and intellectual property requirements there appeared to be less concern about comprehensive national legislation on intellectual property. Stabroek Business has been told that the distribution of illegally reprinted books has now become so widespread in Guyana that children in entire administrative regions of the country now use reprinted and photocopied books.
Both Holder and Austin have identified Region Three as one of the main sources of the illegally reproduced books and say that sales of legitimately produced text books in that region are almost nil.
Holder told the meeting that the requirement under VAT legislation that book importers pay the 16 per cent tax before taking possession of their imports could prove uniquely disadvantageous to booksellers since, he pointed out, the nature of book sales and turnover for booksellers was different in nature from that of other businesses.
"Books, in many cases, unlike food, for example, are held in stock, sometimes for years, and it is not feasible to expect booksellers to find the VAT charges "up front" on each occasion that a consignment is imported. Holder, who had told Stabroek Business earlier this year that he may consider closing his business altogether in the light of the crisis facing the bookselling industry added that VAT on books could push the industry "closer to the edge."
Both Austin and Boodhoo said that apart from the implications of the introduction of VAT for the bookselling industry they were also concerned that should VAT be applied to books it would send the wrong signals as far as the country's commitment to education and enhanced literacy were concerned.
According to Austin the fact that there had been very little investment in bookstores in Guyana over the years was an indication of the lack of profitability in the industry. "I believe that the availability of books and bookstores in a society provides an indication of where that society is heading," Austin said.
He said that the problem went beyond text books and would also affect other genres of reading including research and light reading.