Equal Education (EE) lends its full support to the unanimous resolution by Parliament's standing committee on finance to ask the Treasury to report on the likely fiscal impact of zero-rating VAT on books.
We support scrapping VAT on books because every effort should be made to increase access to literacy and learning. In many countries, the UK for example, there is no VAT on books. Scrapping VAT on books shows that a country is serious about building a reading nation.
Scrapping VAT on books has been a demand put forward as part of EE's Campaign for School Libraries.
- On 21 March 2010 when 10,000 people marched to Parliament for school libraries a memorandum was handed to the Director General of Basic Education, Mr Bobby Soobrayan, demanding that: "The Minister of Finance should investigate whether a VAT exemption on books bought for school libraries would assist schools and provincial education departments without adversely harming government revenue."
- On 30 July 2010 at the conclusion of a 24 hour fast by 5000 learners, EE delivered a memorandum demanding, amongst other things, that "The Minister of Finance must investigate the feasibility of a VAT exemption on textbooks and books bought for school libraries."
Others including journalist Terry Bell and the Democratic Alliance have raised these issues.
In the past Minister Trevor Manuel rejected this proposal on the basis that it would mainly benefit the middle class, who buy books. We note that according to the DA's calculations, which we have not verified, it would cost R247m in state revenue to zero-rate all books. This is affordable, but it could be reduced by zero-rating only textbooks and books bought for school and public libraries, particularly those in poor and working class schools.
Scrapping VAT will be a good step, but it will not be enough.
- To reduce the cost of books, particularly for poor students and the Department of Basic Education (DBE), effective competition between publishers and between suppliers must be maintained.
- The DBE must centralise procurement at a national or provincial level to ensure that its buying power is used to push costs down. The current situation, in which individual schools choose individual textbooks, allows publishers and suppliers to dictate prices and creates the possibility for widespread corruption. Moreover, the fact that schools must buy books from booksellers, rather than directly from publishers, increases the price of these books by 30 percent.
- The DBE should investigate owning textbook copyrights so as to reduce costs.
- Effective and efficient buying and delivery of books is vital to ensure regular supply. Learners, parents and teachers must be vigilant to ensure that this happens.
EE will continue to campaign on all of these issues. We once again congratulate Parliament's standing committee on finance. We expect that Minister of Finance Pravin Gordhan will make his findings public for discussion and debate.