Komiks' unknown reality of tax and other incentives

From the yahoo.com.ph site, the following news item from the Philippine Star is reproduced:

"Reading broadens horizons, regardless of the subject. But for the Bureau of Customs, only books used in schools can be classified as “educational” — a category that exempts an imported book from taxes and duties. The BOC has since revised its rules, slapping taxes on the importation of many international bestsellers and other books that the bureau believes do not fall under the categories of “educational, scientific or cultural.”

The BOC’s move, endorsed by Finance Undersecretary Espele Sales, is based on a review of Republic Act 8047 or the Book Publishing Industry Development Act of 1995. Customs and finance officials said RA 8047 exempted from taxes and duties “only books or raw materials to be used in book publishing.” Critics pointed out that slapping the taxes and import duties violated the 1950 Florence Agreement on the Importation of Educational, Scientific and Cultural Materials, to which the Philippines was a signatory in 1952. The treaty provides for the duty-free importation of books to guarantee the free flow of “educational, scientific and cultural materials” among countries. But BOC and finance officials reportedly believe that novels and other international bestsellers do not fall under any of these categories.

The new rule has reportedly led to a halt in book importations in recent months, and the absence of new book titles at popular chains. A number of those books are geared toward young readers. With the Internet, television and Wi-fi competing for children’s attention these days, parents count themselves lucky when their children bother to read books. Many youths who enjoy light reading such as the “Harry Potter” series and the “Twilight” vampire chronicles eventually go on to heavier subjects including non-fiction and classic literature. Book enjoyment is carried on into adulthood. Does education stop after college graduation?

Taxes and import duties are passed on to consumers by book dealers, and higher prices could discourage book reading among Filipinos with a limited budget. Duty-free importation has allowed Filipinos to enjoy books at prices that are often lower than those in the sources of origin of the imported items. The government should review whether it wants to deprive Filipinos of this source of learning and enjoyment. - (Philstar News Service, www.philstar.com)"

After considering protests from the NBDB and other bodies, the action was thankfully withdrawn. For now at least. It can always come back whenever our cash-strapped government needs money to fill its dwindling coffers. A close call but its no reason to sit on your laurels. Will another protest work then? You never know.

The Book Publishing Industry Development Act of 1995 (i.e., Republic Act No. 8047) gives a broad definiton of "book" so as to encompass "comics" and "graphic novels" within its coverage. It defines a "book" in this manner:

"Section 3 (a), Book. As defined by the United Nations Educational Scientific and Cultural Organization (UNESCO) a printed non-periodical publication of at least forty-eight pages, exclusive of cover pages, published in the country and made available to the public."

This law mandates all persons and enterprises engaged in local book publishing and its related activities to register as such with the National Book Development Board. Once qualified for registration, the local book publisher is entitled to fiscal and non-fiscal incentives under the Omnibus Investment Code (as amended) subject however to qualifications and requirements set by the Board of Investments (BOI). One of these incentives is the grant of tax and duty-free importation of books (for book distributors) or raw materials to be used in book publishing. But the real meat in all this, is the exemption from coverage of the expanded value added tax law, all books, magazines, periodicals, newspapers, including book publishing and printing, as well as its distribution and circulation.

Is the publishing, printing, distribution and circulation of local comics or "graphic novels"(in either [periodical or non-periodical] magazine or book format) exempt from the 12% E-VAT? The answer is a resounding YES. Are comics or "graphic novels" in either magazine [periodical or non-periodical] or book format, qualified then for the additional fiscal and non-fiscal incentives under the Omnibus Investments Code? Generally, the answer is in the NEGATIVE. This is so because as you read RA 8047, This particular benefit is reserved only for "educational" textbooks and "educational" and "periodical" comics, that is, a print publication that appears at regular intervals. In fact, Under Section 5 (v) of RA 8047, it is explicitly stated that the National Book Development Plan shall include: "provisions for producing books or other periodicals such as appropriate or selected comics as instructional or teaching material for such various categories of readers in the country as pre-school children and schoolchildren, school drop-outs, neo-literate, the handicapped, professionals, general readers and ethnic groups;"

So, if you put out an instructional and educational comic that appears at regular intervals, is less than 48 pages, is published in the Philippines and as publisher, you register it with the National Book Development Board, you not only get the E-VAT tax exemption, but also the fiscal and non-fiscal incentives under the amended Omnibus Investments Code.

The issue now however is, WHY limit the grant of these fiscal and non-fiscal incentives under the amended Omnibus Investments Code, only to instructional and educational comics that appear at regular intervals? Why not apply the same to non-instructional, entertainment-based comics that are either periodicals or non-periodicals? Doesn't purely entertainment-based and "Tagalog" language komiks help promote local culture and literacy, as well as generate employment? Why the seeming bias against "entertainment"? Is the law implying that there is no intellectual value whatsoever that could be gleaned from entertainment-based comics? If so, what are the reasons? The law does not say.

Local komiks history has shown that entertainment-based Tagalog komiks not only helped many Filipinos how to read at an early age, but through its visual appeal, help inculcate as well an appreciation for the illustrative arts. It also generated employment in allied industries of distribution, collection, paper, ink, printing press maintenance and others. The fiscal and non-fiscal incentives under the Omnibus Investments Code should apply as well to entertainment-based comics that are either periodicals or non-periodicals.

It is therefore, a more worthwhile and yes, REWARDING endeavor if there was some concerted, collective action for this amendment and modification of the Book Development Act of 1995, instead of wasting energy on a directionless controversy involving a B-movie director and has-been komiks "novelist" winning the 2009 National Artist Award, or a komikeros' misinformed advocacy for a government's grant of vague "tax incentives" to local comics publishers.

You want to help convince local and prospective print publishers to go into comics publishing? You want to help jumpstart a new local comics industry? You want to help promote local comics publishing as an untapped yet potential creative industry? Tell them about the 1995 Book Development Act and what you're doing to help improve its provisions.