POSITION PAPER OF THE BOOK DEVELOPMENT

ASSOCIATION OF THE PHILIPPINES RE TAX AND

DUTY FREE IMPORTATION OF BOOKS INTO THE
COUNTRY

INTRODUCTION

The Book Development Association of the Philippines,

composed of various stakeholders such as publishers, authors,
distributors, book sellers and others who are actively involved
in pursuing the development of the Book Industry in the
country, are one in vehemently opposing the issuance of
Department Order 17-09 dated 24 March 2009 and issued by
the Hon. Secretary of Finance, Mr. Margarito B. Teves, which
itself was based on the Memorandum re Clarificatory
Guidelines on Duty Free Importation of Books dated 10 March
2009 issued by the Hon. Undersecretary Estela V. Sales.

With all due respect, the said Department Order and the
Memorandum are legally infirm and without any basis under
the present state of the law affecting book importation.

DOF’S OWN MANDATE, VIOLATED

On its website, the Department of Finance (DOF) is described to

have “the critical tasks of revenue generation, resource
mobilization and fiscal management rest on the shoulder of the
Department of Finance.” Admittedly then, the DOF must
always be ready with the funds to sustain the government
machinery in providing the general populace with all its basic
needs.

Undoubtedly, it is an unenviable mandate, considering the

gargantuan fiscal problems facing the DOF. However, in its zeal
to perform its duties and functions, the DOF sometimes loses
track of its focus and implements questionable ideas that causes
undue hardships to the very citizens for whom its fiscal and
fiduciary duties primarily are directed and are also its ultimate
beneficiaries. This is one instance of such lack of focus. This is
all the more surprising too, considering that the very law
directly affected, i.e. Republic Act No. 8047, was also authored
by non other than the Hon. Secretary of the Department of
Finance, who was then a lawmaker and part of the 9th
Congress when said RA 8047 was enacted.

I. Republic Act No. 8047 (henceforth “RA 8047”), i.e. the

Book Publishing Industry Development Act, which created the
National Book Development Board (NBDB) is the latest law
that directly governs the importation of books into the country.
As the latest legislative enactment from our lawmakers covering
the specific subject of book importation, it must, by necessity,
take precedence over all others. Thus, all other laws which
previously governed and affected the importation of books into
the country were either directly or indirectly repealed or
modified accordingly. One such affected law is Section 105 (s)
of the TCCP, as amended. RA 8047 is entirely anathema to
Section 105 (s) of the TCCP. The Florence Agreement, which
was clearly taken into account during the enactment of RA
8047, does not affect the proper implementation of RA 8047
with regard to book importation. In fact, the goals of the
Florence Agreement is strengthened by RA 8047.

1.1 We respectfully disagree that, outside of importation of

books done by non-stock, non-profit educational institutions
and those with special Charters, there are three (3) instances
wherein duty-free importation of books may be allowed: under
Sec. 105 (s) of the TCCP, under the Florence Agreement and
under RA 8047. With all due respect, there has been a gross
mis-appreciation of the said laws, and the Guidelines that were
issued have no basis under the present state of the law affecting
book importation.

It is clear as daylight that whenever books are imported into the

country, (other than those governed by special Charter), the
law that would now govern is Republic Act No. 8047. To say
otherwise would be to disregard the clear import of the said
law, which involves itself strictly with the development of the
Book Publishing Industry as well as all its ramifications. One
such ramification is the importation of “books” per se. And
consequently, the definition of which (i.e. books) the law has
not placed any limitations whatsoever in full deference to the
rationale for the law’s enactment as well as in complete accord
with the UNESCO Florence Agreement.

1.1.1 RA 8047, which originated in the Senate in 1992 (Senate

Bill No. 252) and its counterpart bill in the House of
Representatives (House Bill No. 12614) had a long an arduous
journey in the deliberations between the various committees of
both legislative chambers before it was submitted to the
Bicameral Committee which eventually came into law as RA
8047 in 1995. Perhaps it would serve the DOF well to put some
effort to delve into the Legislative History of the said law before
it comes out with pronouncements that adversely affect the
proper implementation of the law. Especially so in this case
when the Hon. Secretary of the Department of Finance, who at
that time was a Member of the House, is also an acknowledged
author of said law.

1.1.2 With all due respect, at present, the DOF does not have
any authority to issue any prior approval for the importation of
books, of whatever nature or type; and neither for their tax and
duty free release by the Bureau of Customs (BOC). If such
authority to approve is actually necessary, this authority
properly rests with the present National Book Development
Board (NBDB) and its Directorate. This was clearly the import
of the lawmakers when they came out and enacted RA 8047:
so that one law (other than those directly affecting educational
institutions that are non-stock and non profit and those with
their own Charters) would govern all aspects of the Book
Industry. Too many laws being implemented merely gives
opportunity for the commission of graft and corruption as well
as tax evasion.

1.1.3 Admittedly, Section 105 (s) of the TCCP had already

been amended by several subsequent enactments. It is thus
untrue for the Memorandum of 10 March 2009 to state that
no amendments have been made. And as stated in the
questioned 10 March Memorandum, one later enactment in
particular (i.e. PD 1464) even gave the Department of
Education, Culture and Sports (DECS) the authority to issue
certifications to support the release of imported books held by
the Bureau of Customs (BOC).

1.1.4 That change by itself removed any authority for the DOF
to issue any sort of approval regarding the importation of
books into the country. Section 105 (s), as amended, clearly
provides that once the certifications were issued by the DECS, it
simply became a MINISTERIAL duty on the part of the Bureau
of Customs to allow the tax and duty-free entry into our
country of the imported books. Otherwise stated, the BOC
and/or its parent, the DOF had no authority to disallow the tax
and duty–free entry of the imported books once the DECS
certifications were already in place. The law did not give the
BOC/DOF any right to PREVENT the tax and duty-free entry
of the imported books once the DECS certification was
submitted. For the DOF to now argue otherwise would be to
arrogate unto itself legislative powers which it does not have.

1.1.5 Certainly, under the said previous law, the types of books
covered were only those of an economic, technical, vocational,
scientific, philosophical, historical or cultural nature. Thus,
going by the legal maxim “Expressio Unius Est Exclusio
Alterius” whereby the express mention of one thing means the
exclusion of all the others, it necessarily dictates that those
books that do not come under the types enumerated are not
covered by the DECS certifications and thus comes under the
general scope of the taxing powers of the DOF/BOC.

1.1.6 Nevertheless, even this authority of the DECS to issue

certifications as well as all the related ramifications thereof was
subsequently removed in 1995 through the enactment by
Congress of Republic Act No. 8047, entitled the Book
Publishing Industry Development Act of 1995.

1.2 Notably, the Fiscal Incentives provision, i.e. Section 12 of

RA 8047 specifically provides that “In the case of tax and duty-
free importation of books or raw materials to be used in book
publishing, the Board and its duly authorized representatives
shall strictly monitor the quality and volume of imported books
and material as well as their distribution and the utilization of
the said imported materials” (Italics ours). Necessarily therefore,
if any sort of certification of the type that is to be presented to
the Bureau of Customs (BOC) is required regarding the
importation of books, it is the NBDB Board, to the exclusion of
all other government agencies that has the authority under the
applicable law to issue such certifications, if it all this becomes
necessary.

1.3 Verily, the DECS’ authority in regards to the importation of

books had been stripped by RA 8047 as early as 1995. Still, as
part of the governing board of the NBDB, the DECS as well as
the CHED is still part and parcel of the protocols involved in
the importation of books into the country.

However, such is not the case with the DOF. Under the present
state of the law affecting the importation of books, the DOF has
not been given any authority at all to DISAPPROVE once the
importation of books has been given a go signal, so to speak,
by the NBDB. Therefore, it is abundantly clear that the DOF
simply has no authority and in fact has nothing to do with
regard to the importation of books except to impose no taxes
or duties on the same.

II. It is erroneous to conclude that the imported books should

be used for book publishing, equating it to a raw material. This
is an absurd misreading of the law. Once a book is released to
the public, it is already deemed published. How then can a
published book be used for book publishing? The DOF seems
to equate “Book Printing” with “Book Publishing”. This is a
major misapprehension which is quite far from the true intent
of RA 8047 as envisioned by its authors.

2.1 It is worthwhile to note that even from the time Republic

Act No. 8047 was still in its infant stages before the Senate (i.e
SB No. 252) and the House of Representatives (HB No.
12614), it was fully understood by the lawmakers even then
that the importation of books by themselves, as part of the
activities related to the book publishing industry, was tax and
duty-free. And by “books” the lawmakers meant ANY kind of
book and of whatever nature, as long as it comes into the
definition culled from the UNESCO backed Florence
Agreement. And under the Florence Agreement, Annex A (i)
simply points to “Printed Books” as the first class of “books”
that is tax and duty exempt.

2.1.1 This matter regarding “tax and duty free book

importation” was already a foregone conclusion, and even a
cursory look at the deliberations done before both the House
and the Senate would show that fact. The earliest recorded
reference concerning the fact that book importation per se
(without specifying the type or nature of the book) is clearly
understood to be tax and duty free is the Explanatory Note of
Senate Bill No. 252 given by then Senator Angara in his
sponsorship speech on 16 November 1992. It was clearly stated
therein that “…..While imported books are tax and duty free,
following the Florence Agreement on the Free Flow of
Information, imported paper to be used in the production of
the same books are heavily taxed. The country imports finished
books tax-free….” Sen. Angara continued to say that “It is
much better to import books than to print books in this
country because imported books do not attract any duty or tax
at all.”

2.2 On the other hand, Section 105 (s) of the TCCP refers to
books and other publications that are of “Economic, technical,
vocational, scientific, philosophical, historical, and cultural”
and even religious nature. However, as clearly understood by
the lawmakers at the time RA 8047 was enacted, the
importation of books as an independent activity and as part of
the paradigm of “Book Development” is by itself tax and duty-
free. In other words, it is separate and entirely distinct from
importation of raw materials.

2.3 It is thus palpably wrong to conclude that the importation

of books would be for the purpose of using these as some sort
of raw material for “book publishing” purposes. This would be
illogical considering that once a book is released to the general
public, it is already considered published because the
information contained therein is already made available to the
public. Which is precisely the reason for being of the Florence
Agreement, i.e. the Free Flow of Information, as taken into
account in the enactment of RA 8047.
III. Verily, the word “books” as provided under RA 8047
refers to ANY and ALL types and kinds of books, not only to
those that are for “economic, technical, vocational, scientific,
philosophical, historical, and cultural books and/or
publications” as the questioned Department Order No. 17-09
would like everyone to believe. This conclusion is amply
supported by the Florence Agreement, of which our country
has been a signatory since 1952, and which was taken into
account when RA 8047 was being deliberated on until fully
enacted into law.

3.1 It is unfortunate that the Hon. Secretary of Finance has

taken a very myopic view of the definition of the word “book”.
Unfortunate because it shows an apparent disregard of the
workings and extent of RA 8047; as well as the UNESCO
backed Florence Agreement, of which the Philippines has
officially been recognized as a signatory since 30 August 1952.
And as earlier intimated, this is all the more unfortunate
because the Hon. Sec. Teves was also an author of RA 8047
and hence is presumed to intimately know the Congressional
deliberations conducted prior to the enactment of that law.

3.2 With specific regard to the Florence Agreement and the

Protocol of Nairobi (1976), despite the somewhat limited
connotation of its title , it cannot be said enough that the main
goal therefore was the Free Flow of Information among the
signatory nations. Accordingly, that was one of the pillars of
the Agreement and the subsequent Protocol.
3.2.1 More importantly, the Florence Agreement DID NOT put
any limitation as to the TYPE or KIND of book that the
contracting states undertook not to impose or apply customs
duties or other import taxes. This is well illustrated by the fact
that the types of books that are referred to under its Article 1
(a) simply refer to them as “Books, publications and
documents, listed in Annex A to this Agreement.” And a quick
look at said Annex A reveals that the “books” referred to
therein are simply called “Printed Books” . The term “Printed
books” does not have any limitations attached to it, thus the
books covered therein need not be of a purely scientific,
technical or cultural nature. It is Article 1 (b) of the Florence
Agreement that specifically mentions “educational, scientific
and cultural materials”, and that these are listed in Annexes B,
C, D and E of the Agreement. That this is rightly so is quite
understandable given the primary goal of Free Flow of
Information espoused by the Florence Agreement. This goal
would not be served well if the term “books” were considered
of limited scope only.

3.3 Notably, and as correctly pointed out by the DOF

Undersecretary in the Memorandum of 10 March 2009, RA
8047 referred to the Florence Agreement in coming up with its
definition of “books” in Section 1 of said law. However, note
that even our own lawmakers in Section 3 of RA 8047 saw it fit
not to limit the definition of “books” into strictly scientific,
technical, cultural, etc. This was merely reflective of their
understanding of the all encompassing scope of the provisions
of the Florence Agreement and its Annexes.

3.4 Had the lawmakers really intended to limit the tax and duty
free importation of books to those specific subjects as provided
under Sec. 105 of the TCCP, they could have easily done so.
Yet, it is clear as daylight that there was no limitation imposed.
It is thus conclusive that Republic Act No. 8047, which
specifically provides for an exclusion from the imposition of
taxes and duties on “books” per se already covers ALL types of
books, and not only those within the list provided under Sec.
105 (s) of TCCP. Thus, effectively, Section 12 of RA 8047, in
conjunction with Sec. 19 thereof, repealed by implication Sec.
105 (s) of the TCCP in that the two provisions cannot stand on
their own. The all encompassing scope of RA 8047 simply
trumps the limited scope of Sec. 105 (s) of the TCCP.

IV. Unarguably, one of the primary duties of the NBDB is to

require and accept the registration of entities engaged in book
publishing and its related activities. Section 3 (g) of RA 8047
stated that book publishing is the process of choosing and
making books…..” To someone who may not be well versed in
the industry, the terms “book publishing” would apparently
connote simply “printing” or “production”. However,
publishing encompasses more than just simply printing and
production. It is an activity intended to disseminate information
to the public. The importation of a book, of whatever nature, is
an activity intended to disseminate the information contained
therein to the public.

4.1 As stated earlier, one vital activity in book development is

book importation, which is a distinctly separate activity from
the manufacture and printing of books (of which the
importation of raw materials becomes relevant). To say that
book importation per se is not part of our national book
development program is to lose track of the actual legislative
intent of the lawmakers at the time RA 8047 was enacted.
4.2 Admittedly, RA 8047 stated that the NBDB was tasked
with the duty of coming up, within 120 days from enactment of
the law, with the guidelines and also to prescribe rules and
regulations specifically those concerning Sec. 6 re Registration
of Entities with the NBDB; Sec. 10 re Public School and
Textbook Publishing; and the aforesaid Sec. 12 re Incentives to
Book Development. As also earlier stated, it is Section 12 of RA
8047 that provides fiscal and tax incentives, and these
incentives include tax and duty free importation of books and
their exclusion from the E-Vat. Another incentive is the tax and
duty-free importation of raw materials to be used for book
publishing.

4.3 Under Section 13 of RA 8047, the guidelines, rules and

regulations pertaining to the Fiscal and Tax Incentives
provision (i.e. Sec. 12) would be done in consultation with,
among others, the Board of Investments, the Bureau of
Customs “and other appropriate agencies from the government
and private sectors….” Additionally, Congress would be given
copies of the guidelines. Unquestionably, said guidelines were
made in consultation with the government agencies concerned,
or else these could not have been issued. Thus, it is quite
surprising that the DOF belatedly raised this issue as to the
proper agency concerned with book importation certifications,
etc. Clearly, under the law, the agency that has cognizance is
the NBDB.

4.3.1 Correspondingly, the NBDB, in coming out with the

Implementing Rules and Regulations for RA 8047, was correct
in directing that it shall liaise directly with the BOC, the agency
directly affected by the book and raw material importations,
rather than with the DOF. The IRR simply was a reflection of
the provisions of the law, Section 13 of RA 8047. The law itself
stated that the implementing rules would be done in
consultation with the appropriate agency, and that would refer
to the BOC in cases of importation. To refer the matters to the
DOF would just create more red tape and thus more
opportunities for graft and corruption to occur, in addition to
putting another level of complexity in the importation
procedures.

V. True, that under the Florence Agreement, contracting states

have the right to take measures to prohibit or limit the
importation of the tax and duty free books. But the limitations
pertain directly to national security, public order or public
morals. Clearly, loss of revenue is not a valid ground to limit the
importation of the matters stated under the Florence
Agreement.

5.1 The Memorandum dated 10 March 2009 also rationalized

that the Florence Agreement has given the contracting states,
such as our country, the right to limit the duty free importation
of books.

5.1.1 Admittedly, this is true. And in fact, the quoted provision

has been reproduced in the Memorandum verbatim. However,
even a cursory reading of the said provision of the Florence
Agreement would make anyone conclude that the limitations
contained therein refer only to matters which directly affect
national security, public order or public morals. Thus,
limitations which are imposed due to a palpable or even
apparent loss of government revenue occurring as a result of
the tax and duty-free allowance of books into the country is not
a valid ground for the imposition of limitations or prohibitions
thereof. It would be quite a long stretch to think that revenue
generation is directly related national security, public order or
even public morals. If such were the case then almost all aspects
of government service could be read into those categories. That
would be ridiculous at the very least.

5.1.2 It is thus an egregious error to quote a provision and read

something into it that blatantly goes against the plain reading of
the provision. Especially so in this case when the provision
quoted is glaringly clear and precise.

VI. We agree that it is correct that a State may make such

modifications in its legislation as may be necessary to ensure the
fulfillment of its obligations in international contracts or
agreements. Thus, RA 8047 as presently enacted specifically
supercedes the erroneous complexities created by Sec. 105 (s) of
the TCCP.

6.1 Sec. 105 (s) of the TCCP concerns itself only with the
importation of books that are of a specific nature, i.e.
educational, scientific, economic, technical, religious, etc.
Notably, RA 8047 was enacted subsequent to Sec. 105 (s) of
the TCCP.
6.2 It is a fact that RA 8047 has not provided for any definition
of the specific nature for the term “books”, except that it is a
“printed, non periodical publication of at least forty eight (48)
pages, exclusive of cover page, published in the country and
made available to the public”.

6.2.1 This is contained in Section 3 (a) of RA 8047, which also

stated that it is a definition adopted by the “United Nations
Education Scientific and Cultural Organizations
(UNESCO)….” Thus, there is a reference in RA 8047 to the
Florence Agreement, which as earlier discussed above only had
the words “Printed Books” in its Annex A (i). It is clear that
under both the Florence Agreement and as reflected in RA
8047, there was no specific mention of the nature of the books,
as to their scientific, educational, etc. nature.

CONCLUSION:

If revenue collection, efficiency and consistency are the avowed

goals of the DOF, then there is all the more reason that only
one agency that should govern the importation of books into
the country. The same agency that has been tasked by law to
uphold the goals of the National Book Development Act. This
agency is the National Book Development Board. The NBDB
as such shall be the one to issue certifications as to the
importation of books of whatever nature and type. Hence, the
importer need only secure the necessary papers from the NBDB
in order to validly import the books into the country, without
anymore stating the nature or type of the books being
imported, or under which law it is being imported. Accordingly
also, the imported need not state the fact that the books are
being imported for purpose of eventual sale, because RA 8047
encompasses all types and nature of books and does not
discriminate as to the purpose of the importation. Neither does
the importer have to state that fact the imported books will be
used as raw materials for book publication, because this is quite
absurd and illogical. Such are the ramifications of the
enactment of RA 8047.