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Govt. slow to lift book tax despite publishers’ requests
View(s):By Nidarshani Wickramasinghe
The government has so far not provided a favourable response to the budget proposal and requests submitted by the Sri Lanka Book Publishers’ Association (SLBPA) to remove the tax imposed on books.
The President of the Association, Dinesh Kulathunga, told the Sunday Times that although they had made written representations to the International Monetary Fund’s (IMF) Resident Representative in Sri Lanka too regarding this issue, no response has been received so far.
“In January 2024, taxes were imposed on books in accordance with IMF conditions. In total, it amounts to 20.52%. All countries in the SAARC region have exempted books from taxes. Sri Lanka too had been exempted from taxes prior to 2024,” Mr. Kulathunga pointed out.
More than 90% of publishers in Sri Lanka are small enterprises, most of which operate just below the VAT threshold. Many of these publishers rely on an independent network of bookstores supported by larger publishers, and their survival is closely tied to the accessibility and affordability of books.
“Our industry already contributes over one billion rupees annually in VAT through import taxes on essential raw materials such as paper, ink, and machinery. Imposing VAT on final books feels like double taxation, further intensifying the financial strain on an already fragile sector,” Mr. Kulathunga pointed out.
“Sri Lanka has long been a proud signatory to the UNESCO Florence Agreement, which emphasises our commitment to making educational, scientific, and cultural materials accessible and affordable to all. Unfortunately, recent requests for an additional 10% charge from registered vendors have further squeezed small publishers, consuming their already narrow profit margins of 10–15%,” he said.
Minister of Buddhasasana, Religious and Cultural Affairs, Hiniduma Sunil Senevi, told that the relevant proposal had been forwarded to the Secretary of his ministry and discussed. However, he mentioned that the progress on the matter should be inquired from the Secretary.
Meanwhile, a board member of the Sri Lanka Book Publishers’ Association, M. Safeer, alleged that no government has taken steps to protect cultural producers.
“In the world, intellectual property is not subjected to VAT. VAT is 18%, and the Social Security Contribution Levy is 2.52%. Ultimately, people have to pay 20.52% for a book.
In a properly developed country, taxes on books should be removed. In Sri Lanka, the cultural sector is not even recognised as an industry. Yet, it is required to pay taxes. Taxes are not inherently bad, but the issue is unnecessary taxation.
“Around 2 million people attend the Colombo International Book Fair. If we assume each person spends around 5000 rupees on books, it generates significant income for local producers. However, imposing taxes causes the sector to collapse. Moreover, there is no support from the government. There are no proper halls outside Colombo to hold exhibitions.
“Writers in this country are not protected. If a book costs 1000 rupees, the writer receives only 8%. Distributors or bookshops take 40%. The remaining 52% must cover publishing, printing, marketing, and storage costs. Publishing a 250-page book typicallycosts around 300,000 to 350,000 rupees. In Sri Lanka, writers, publishers, and printing institutions are all struggling. The government must think deeply about this.
“In many countries like Turkey and India, grants are provided by governments when books are translated into other languages. Cultural ministries or relevant institutions support such initiatives. There is nothing like that in Sri Lanka.”
When examining the situation from the perspective of writers following the implementation of this tax, they strongly criticised that even though discussions were
held with the government at the beginning, no benefits were achieved.
“Several publishers met with the then Central Bank Governor, Nandalal, and explained the crisis, requesting tax relief. At that time, he said “People would get used to this just like they did with other things,” said literary figure Thimbiriyagama Bandara in his comments to the Sunday Times.
“In recent times, due to the increase in printing costs, book prices had already risen significantly even before the 2024 tax increase. At that point, writers strongly requested tax concessions on raw materials. However, the government did not make a policy decision.”
Award winning author Sumithra Rahubaddhe said that in a country where someone once asked “Can literature be eaten?”, it is not surprising that such a situation has arisen.
“Now the market is becoming increasingly difficult. We see that when people come to book fairs, they think about how many books they can buy for 1000 rupees, or whether they can buy ten books for 5000 rupees. They are not looking for good books. The probability of reading quality literature decreases. Readers do not care about the reasons behind the price increase. Instead, they blame the writer for high prices.”
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