July 13, 2012
Books and/or taxes
by Dan O'Connor
In Chile, a group calling itself Libros Sin IVA (Books Without VAT — “value added tax”) is petitioning the government to get rid of the 19% tax on books — a tax levied for the first time by dictator Augusto Pinochet, in 1976. Critics have characterized the proposal as a utopian scheme to create “a reading society,” but Libros Sin IVA spokesman Marco Antonio Coloma acknowledges that repealing the tax is no panacea:
Getting rid of the value added tax on books should be the first piece of a more ambitious, comprehensive and definitive plan on promoting books and reading. Why? Because, following the example of an overwhelming number of countries, there should be consistency between the importance we attach to books as a society and the treatment books receive in our tax system.
“An overwhelming number of countries” ? — if that sounds topsy-turvy, appropriately antipodal, and alien, it’s because the United States is, of course, not among them (maybe this an opportunity to make bedfellows of Grover Norquist and the American Library Association). According to a 2010 report by the Democratic Alliance — a group campaigning to end the 14% tax on books in South Africa,
In numerous countries – including Ireland, Norway, the United Kingdom, Brazil, Mexico, the Philippines, Australia, Ghana, and Kenya — no tax is charged on books at all. Elsewhere, the debate centres on just how low the reduced rate should be, rather than whether the full rate should still apply. Countries that have adopted reduced rates of tax on books include Sweden, Finland, Iceland, China, Austria, France, Germany, Belgium, Cyprus, the Czech Republic, Greece, Hungary, the Netherlands, Spain, Slovakia, Romania, Slovenia, and Malta.
The standard VAT in Montenegro is 17%. Books are taxed at the reduced rate of 7%. Even Montenegro, little Montenegro down on the Adriatic sea! Not here. Of course, books are much less expensive in the United States, which also has about 290 million more people. In Chile you can expect to pay “$50-$80 for a new hardcover and $30-60 for a new softcover” — 54% of Chileans say they would buy more books if they were cheaper. And ebooks, which have monopolized recent conversation about pricing in the US, do not seem to enter the calculations of Libros Sin IVA. Coloma, for example, imagines a new world in which book buyers “grab a book whenever [they] want, write on it, highlight it, lend it to someone, give it as a gift or even abandon it.”
Libros Sin IVA says that books “are still one of the main vehicles of knowledge, entertainment, and construction of a reflective and inclusive citizenry.” The South African Democratic Alliance says that “a tax on books is a tax on learning, knowledge and literacy.”
By taxing books as we would any other commodity, do we demonstrate the “importance we attach to books as a society”?
Dan O'Connor is the Managing Editor of Melville House.