Minister of Finance Trevor Manuel does not appear to have applied his mind fully before rejecting the call to scrap value-added tax (VAT) on books, Care campaign coordinator Terry Bell said on Thursday.
”Care supporters in large numbers have already indicated that they will continue this fight, which is fundamentally against the scourge of illiteracy,” he said.
Care is the Campaign against Reader Exploitation, and Bell was reacting to Manuel’s announcement on Wednesday that with ”some personal regret”, he could not justify the scrapping.
Manuel said problems included defining a ”book” for tax purposes, and that the case for reducing tax on magazines or coffee-table publications was not very compelling.
”As it happens, the tax loss will be large, and would very largely go to higher-income households. With some personal regret, I cannot see how we could justify this change.”
In a subsequent interview after the speech, Manuel said that ”only the publishers and distributors” would benefit.
Bell said Manuel appeared to be ”fixated” on high-income earners being the only beneficiaries of VAT removal from books.
”Once again he referred to ‘coffee-table books’. I assume he means large-format books that are more decorative than informative, and generally extremely expensive.
”The small minority of people who tend to buy these books are the same people who now benefit from the removal of ad valorem [also value-added] excise tax on a range of imported luxury items from watches and clocks to cosmetics and cars.”
Many large-format books are both highly decorative and extremely informative, such as some of the latest atlases, or books on art or mythology.
”To confuse magazines and books as if these would be impossible to distinguish is also puzzling. Minister Manuel certainly does not appear to have applied his mind fully to the issue.” — Sapa