The “Tax Reform for Attracting Better and High-quality Opportunities,” or “TRABAHO” under House Bill No. 8083 has just been passed in the House of Representatives. Now pending before the Senate is the “Corporate Income tax and Incentives Reform Act” under Senate Bill No. 1906.

Both Bills propose, among others, to repeal Section 12 of R.A. 8047 which provides tax incentives for book development.

Section 12 of R.A. 8047 which consists of two (2) tax incentives expressly provides the following:

“SECTION 12. Incentives for Book Development. Persons and enterprises engaged in book publishing and its related activities duly registered with the National Book Development Board shall be entitled to the applicable fiscal and non-fiscal incentives as provided for under Executive Order No. 226, otherwise known as the Omnibus Investment Code, as amended, subject to the qualifications and requirements set by the Board of Investments (BOI); Provided, That book development activities shall always be included in the Investment Priority Plan (IPP).

“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 materials as well as their distribution and the utilization of the said imported materials.

“The Board shall also recommend to the proper prosecuting agencies any violations of the conditions of the duty-free importation. Books, magazines, periodicals, newspapers, including book publishing and printing, as well as its distribution and circulation, shall be exempt from the coverage of the expanded value added tax law.”

While the National Book Development Board (NBDB) recognizes the intention of the honorable proponent to expand the tax base , repeal of tax incentives under the abovementioned law disregards the long-established principle embodied in the Florence Agreement.

Hence, NBDB respectfully opposes the passage of the Bill insofar as the proposed repeal of the tax incentives provisions on book publishing is concerned.


The exemptions from tax and customs duty importation of books or raw materials for book publishing and from the coverage of the e-vat should not be repealed.

The National Book Development Board, being the government arm in the development of the book publishing industry in the country, supports its stakeholders more specifically through the enjoyment of applicable fiscal and non-fiscal incentives under the Omnibus Investment Code of 1987, and the e-vat under the National Internal Revenue Code (NIRC), as amended.

Violation of the Florence Agreement

Senate Bill 1906 and House Bill 8083 run in conflict with one of the objectives of the National Book Policy under the Book Publishing Industry Development Act which is to reaffirm and ensure the country’s commitment to the UNESCO principle of free-flow of information and other related provisions enshrined in the Florence Agreement and in other similar international agreements .

When the Philippines signed the UNESCO Florence Agreement in 1952, the Philippines has moved towards the abolition of trade barriers that impede free-flow of information between and among contracting states.

The Florence Agreement provides further that the contracting States undertake the following:
“(a) Continue their common efforts to promote by every means the free circulation of educational, scientific or cultural materials, and abolish or reduce any restrictions to that free circulation which are not referred to in this Agreement;
(b) Simplify the administrative procedure governing the importation of educational, scientific or cultural materials;”

It can be observed from the foregoing obligations that the Philippines is committed to abolish or reduce any restrictions to the free-circulation of materials. Imposing certain conditions on the items that are supposed to be enjoyed unconditionally will violate the said obligations.

The general provisions on the availment of tax incentives under this bill directs the Investment Promotion Agencies (IPA) to apply for evaluation and review by the Fiscal Incentives Review Board (FIRB) . It would negate the inclusion of book development activities in the Investment Priority Plan (IPP) and will eliminate the legal basis for support of persons and enterprises engaged in book publishing and its related activities.

Lost of Opportunities in the Local Book Printing Industry

The Tax and Duty-Free Importation (TADFI) of raw materials is open to all NBDB-registered book publishers, book printers, and book industry associations (collectively known for this purpose as “importers”). These clients resort to the importation of raw materials for book publishing such as book covers, other types of papers, and inks in order to:
1. acquire raw materials at a cheaper price;
2. lower the total cost of book production; and
3. acquire raw materials which are not locally available.

Removal of the incentives would force the book publishers to print/publish their books abroad only to be imported thereafter and to be taxed duty-free. As a business decision, this can be logical. However, the local book printing industry would be vulnerable and would lose opportunities.

Unaffordability and Inaccessibility of Books

The NBDB is mandated by law to ensure, among others, affordability and accessibility of books for all segments of the population, and to promote readership.

In the 2017 Readership Survey which was recently conducted by the NBDB in partnership with the Philippine Statistical Research and Training Institute (PSRTI), records show the vital role of books in the education and learning of both young and adult readers. This result reveals that most of the respondents depend on reading as a tool in their respective professional development and goal.

Another aspect of the Survey reveals that majority of the respondents, both young and adult, read storybooks and picture books and are willing to spend on books as much as P199.00 pesos.

Section 12 of R.A. 8047 consists of two (2) tax incentives as follows:
1. Tax and duty-free importation of raw materials for book publishing; and
2. Exemption from the expanded value-added tax.

Should this provision be repealed, the customs duty paid in the importation of raw materials and the amount incurred in the payment of the value-added tax would have to be added to the cost of book production, which costs would eventually be passed on to buyers by adding the cost to the book price upon reaching the market. This scheme will greatly affect the willingness and capacity of readers to spend on books considering its high cost.


To give life and meaning to the Constitutional pronouncement in the promotion of quality education , various statutes affecting the book publishing industry as a whole should preserve and continue to support the free-flow of information pursuant to the Florence Agreement and its protocol.

Thus, the NBDB respectfully requests the Honorable Members of the Senate to consider book development activities in the Strategic Investments Priority Plan to the passage of the “Corporate Income Tax and Incentives Reform Act,” by preserving the tax incentives under Section 12 of R.A. 8047.

Respectfully submitted,


National Book Development Board
Unit 2401 Prestige Tower, F. Ortigas, Jr. Road,
Ortigas Center, Pasig City

Copy furnished:

Office of the Senate President
Senate of the Philippines
Pasay City

Chairperson, Committee on Education
Senate of the Philippines
Pasay City

Senate of the Philippines
Pasay City

Director General
Senate Tax Study Research Office
Room 524 Senate of the Philippines
Pasay City



i. Explanatory Note, Senate bill No. 1906, page 2
ii. Section 4 (j), R.A. 8047
iii. Article IV (a), (b), and (c)
iv. Section 292 (B), S.B. No. 1906. Customs Duty Incentives
v. Section 290, S.B. No. 1906. General Provisions
Vi. Section 12, R.A. 8047
Vii. Section 4 (c), (d), R.A. 8047.
viii.Annex – A (Readership Survey Result on Reasons for reading)
ix. Annex – B (Readership Survey on Genres)
x. Annex – C (Readership Survey Result on Spending)
xi. Article XIV, Section 1, 1987 Philippine Constitution