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The Bangladesh Observer

Dhaka – Friday July 30, 2004

 

Elected-Selected Taxation on Education—The problem of imposing Taxation on Books and Journals in Bangladesh

-Chowdhury K.A

Any material printed  or otherwise that has educational value is desirable for a society willing to learn, not only for their economic development, but also for the development of their collective self. Those nations we know as accomplished have been proactive in the creation and acquisition of such materials. They do so because they do not take their state of being for granted. The leaders of those nations abide by the time-tested police of having its people engage in educational consumption to the extent possible given the relevant constraints.

 

Human capital formation is a necessity for the long-run economic growth of a nation. Having said that, an important piece of information may illuminate the concerned. During the years 1820-2000, the land we know as Bangladesh enjoyed a growth in real GDP of virtually zero. Whereas starting from the 1950s, the Japanese economy made steep progress towards converging with the US economy: ours never showed a blink of convergence towards say Malaysia or deviation from its stagnant state of real GDP growth. We were desperate 180 years ago, and without  growth; the story is same today.

 

Experts on ethics will tell you that wealth has an impact when it comes to developing moral code of conduct about environment, animal welfare, etc. Their unstated assumption is that the political elites of the society in question conduct themselves through the rule of law, not loaded guns or contra-Max Weberian’ bureaucracy. Wealth gives you one set of ethics; another set of ethics gives you wealth. That is why we have Japan, Malaysia, and Bangladesh.

 

Investment in human capital formation and management of currently available human resources-includes both anticipatory and just for the sake of knowledge acquisition of educational materials. The 1952 Florence Agreement, an international piece of legislation that was sponsored by UNESCO, asked government to “facilitate the free flow of educational, scientific, and cultural materials by the removal of barriers that impede the international movement of such materials.” As with any international agreement, one relies on the commitment of the parties to honour the letter and the spirit of it, enforceability is absent. As a member of UNESCO Bangladesh is required to follow the Florence Agreement for its own benefit i.e. the benefits of its citizens.

 

The political elites of our nation, the elected and the selected, diligently ensure paper/vocal ethics as opposed to walking the walk’ ethics. The fiscal instrument of taxation is a potent witness of the self-defeating nature of their state management. Their taxation/tariff policy towards educational materials acquired from abroad by importing firms will clarify the previous sentence. The relevant bodies-Ministry of Education, Ministry of Finance, and the National Board of Revenue have been imposing barriers through their coordinated effort on dual-purpose educational imports like literary works, and strictly educational ones like textbooks and journals on various subjects using the vague terms of other books Recently the bar had been raised in intolerable levels: the grip is being progressively tightened. The classification scheme used by taxation/tariff authorities in order to judge the size of tax liability poses questions regarding competence of their minds, euphemistically put. To cut a long story short-the game produces, barring the percentage of cost of import including import duty imposed in many names (like import duty, regulatory duty, advance income tax, import surcharge, etc.), are a liability in the range of approximately 37-40 per cent for the importing firms. Importers are also bearing cost like packing, forwarding, airfreight, customs clearance, inland transportation, bank charges etc. The commission/discount they receive from the sources of their import, like those in United States or the European Union, is in the range of approximately 25-45 per cent. We can clearly see the length to which our elites go to provide a one with an enviable incentive package for entrepreneurs interested in importing quality educational materials. The data provided previously are germane to those firms who predominantly acquire from sources outside the Indian Subcontinent. The truth is, a further discussion of the system of classification used for taxing imported publications or an exploration of the reasons for encouraging inter-regional book trade is immaterial to the issue at hand i.e. as to whether consumption flow of any educational materials be regulated. The clear answer is obvious, hopefully not to impose any kind of taxation/tariff on all categories of Educational Materials including books and journals.

 

However, one needs to be patient with his or her government. The eitist mix of our nation is flooded with multitude of socioeconomic problems to address, and they should be excused for being oblivious to real educational reforms. One must note that the highest fiscal allocation is provisioned for ur educational sector, and UNESCO has pointed out in a recently published report that this allocation is proudly the lowest in Southeast Asia. The track record of the political elites is further evidence of their adherence to the concept of continuous quality improvement-repeated pleas from citizens through the media to eradicate such ‘taxing of education’ have been disregarded.

 

Agruments ranged from the unnecessary additional cost to the consumer from the incidence of such taxes to the benefit entailed by higher import volumes of educational materials, from sources in the United States or European Union, in terms of influence that can be exercised in order to have many different textbook published in low-cost editions. Such influence bargaining or negotiating position is earned not because of financial prowess of our importers but on ethical grounds pertaining to us being a least developed or developing nation. Suggestions about careful analysis of the pros and cones of imposing the tariff bar with full participation of all the stakeholders have also been forwarded. Every one of those words have been handled with quiet ruthlessness, a conduct motivated not by reason but by some singular understanding of what constitute bureaucracy and political norm: unfortunately, their understanding is not understandable.

 

One must not be tempted to assume that access to what goes on in the governmental agencies is beyond the commons. In addition, one would be at fault to conclude that the issue have been multiplied by a thousand since the rippling effect of one ill-conceived policy, or one less than robust, will be felt in the end. Time is crying out to ‘walk the talk’ in human capital development, and take the necessary steps to remove all relevant barriers including tariff and non-tariff ones imposed on any educational materials, printed as well as other formats like microfilm, microfiche CD-ROM, or audiovisual books/tariff imposed must be withdrawn immediately without any delay.

 

 

(The writer is a Bangladeshi External Student, London School of Economics)

 

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