Make all books GST-exempt to avoid confusion,
say publishers
Putrajaya should exempt all types of books from the
Goods and Services Tax (GST) instead of limiting the
zero-rating to only a few categories, publishers said,
as they remain in the dark about the mechanics of the
consumption tax on their businesses.
Applying
the tax to only certain categories of books was
confusing, they said, because the materials used in
publishing were not zero-rated and also because of the
many types of books published.
Malaysia Book
Publishers Association (Mabopa) said they were still
unclear as to how GST at 6% would be applied to books
when the tax is implemented from April 1 this year.
"We are having a hard time with everything being a blur,
even with explanations from the Customs Department. It
had not been of much help," Mabopa secretary Arief Hakim
Sani Rahmat told The Malaysian Insider. |
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Arief, who is the managing director of PTS Publication &
Distributors Sdn Bhd, said the GST was now a little more
than two months away but until now, the industry was
still debating the best way to impose the tax on books
because of the variety of book categories.
"This mixed status is very hard because it is so complex
and you need a clear method to implement it," he said,
adding that publishers were feeling anxious over the
situation.
Reading materials are categorised as zero-rated but this
is only limited to some types of books like children's
colouring books, exercise books, text books,
dictionaries, religious scriptures and newspapers,
according to the Customs Department's list.
These categories of zero-rated publications were also
announced by Prime Minister Datuk Seri Najib Razak when
tabling the national budget for 2015 in October last
year.
However, ink and paper, the main
materials to produce books, are standard-rated, or
taxable items under GST.
This has raised questions whether consumers will have to
pay more for books, including the zero-GST ones, Arief
said, but added that people might not have to wait for
the GST to be implemented before seeing price hikes for
books.
"The fall of the ringgit is also affecting our book
industry. When the ringgit drops, paper becomes more
expensive. Paper is already more expensive now because
it is a commodity," he said.
Arief urged Putrajaya to listen to publishers' appeal to
have all types of books zero-rated because the
government had a social responsibility in delivering and
promoting education. "We are not fighting the GST but it
is more appropriate to make all books zero-GST.
"We have been quite surprised with the decision because
ink and paper used to be exempted from the Sales and
Services Tax (SST).
"For that reason, it is the government's social
responsibility not to impose GST on books," he said.
The situation is also affecting those in the alternative
books business, a group that may even be the worst hit
by the GST.
Alternative or independent book
publishers mainly produce and sell books worth not more
than RM50,000 a year, the threshold at which they must
register with the Customs Department.
Neon
Terbit owner, Firdaus Abdillah Hamzah, said the status
of a small-time publisher was the same as book buyers.
"If book buyers feel affected, then small-time
publishers feel the same too," said the man who has yet
to get ready for the implementation of the GST. Firdaus,
like the others, is also questioning why not all books
are zero-GST.
He said the authorities have failed to explain the new
tax to its target groups. "We see the commercial on
television about the GST, but that is not enough to help
us understand the tax," he said.
Independent book publisher, Dubook Press, however, has
decided that the company will not impose the GST on the
books it sells.
Company chief executive officer Mutalib Uthman said they
would strive not to burden their customers and would
look for the most effective way to avoid imposing GST on
consumers, without having to lose too much profit.
The company will try to increase book sales by selling
directly to readers, he said. "Usually publishers bear
higher costs because the middle men take more than half
of the profits we make.
"So we are confident that without middle men, we will be
able to absorb the cost while selling directly to our
readers and not impose GST," he said.
Prior to this, Lembah Pantai MP Nurul Izzah Anwar had
also slammed Putrajaya for exempting only certain types
of books from the GST.
She said a survey by the International Publishers
Association, which looked at value-added GST regimes,
had found that out of 51 countries surveyed, 47 had
special discounts and exemptions on printed books.
The report also said despite the global economic crisis
and the subsequent VAT-GST reforms in many countries,
books were consistently confirmed to be among the goods
and services that merited a special, reduced VAT-GST
rate or exemption. – January 30, 2015.
Source:
The Malaysian Insider
, dated
30/01/2015 |