By Fredrick Obura
Publishers could lose its 60 per cent regional marketshare if a Bill seeking to tax both books and printing papers is re-introduced.
According to Kenya Publishers Association (KPA), the Value Added Tax Bill 2011 would not only introduce a 16 per cent VAT on books, it would also open another window subjecting imported printing materials to 25 per cent tax, which would render the industry non-competitive among peers in the East Africa region.
"The impending law would increase the cost of publishing books in Kenya. Our industry imports 90 per cent of its raw materials, and is already battered by depreciating shilling against major currencies," said Kenya Publishers Association Chairman, Lawrence Njagi.
"We are asking the Government to re-think this decision and consult the industry before enacting the Bill, since it will raise the cost of doing business to the publishers."
He said the Bill would be detrimental to the country’s education if it is passed by Parliament without amendment.
"Publishers are going to hike book prices by between 70 to 90 per cent, which means the quality of education is going to be compromised. Parents are already hit by high prices of essential commodities and I don’t see them putting extra money on books," he said.
Hike prices
Under the free education programme, the Government allocates Sh1,020 for every student per year to buy textbooks. If publishers hike book prices by 90 per cent each, this allocation would dwindle to a pittance.
"It would be too little to buy even a storybook. This would affect education standard, and would negate Kenya’s dream of becoming a knowledge-based economy by 2030," said David Muita, managing director of Moran East Africa Publishers.
On Thursday last week, the publishers said they would increase textbook prices by between 45 and 50 per cent of the current prices if the Government re-introduces 16 per cent tax on learning materials.
Longman publishers said it would weigh production cost and do necessary adjustment if the law is passed in Parliament.
Meanwhile, Moran Publishers said it would hike its prices by between 45 to 50 per cent if the bill is implemented. And in an interview on Monday, the company said he it might hike prices by as much as 100 per cent.
Close shop
"With the closure of major paper factories in the country, we have been forced to import a lot of raw materials. The weaker shilling is making most of us struggle. Another burden on VAT would make most of us close shop," Muita said.
He said weaker shilling has seek the cost of paper prices rise 30 per cent, while ink prices have also risen by 15 per cent.
Meanwhile at a three day International Conference on book development in Africa, Kenya Publishers Association said they would move to court if Parliament passes the Bill.
