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When the Standing Committee on Finance finalises its report to Parliament on the fiscal framework and revenue proposals on Monday, the Democratic Alliance (DA) will be proposing that it includes a recommendation to parliament that the extension of VAT zero-rating to books should be investigated by the Parliamentary Budget Office as soon as it is established. This will enable the matter to be tabled for implementation when the Revenue Laws are amended to give effect to the 2010 Budget proposals later in the year.

On 27 January 2010, the DA held a press conference where we released our proposal to scrap VAT on books. At the conference, we pointed out that Parliament now has the power to amend the national budget and that the people have an opportunity to be heard on how the public financial model can work to the benefit of all South Africans. We stated that we need an immediate reduction of VAT on books and that the DA will lead the way.

Zero rating VAT on books would significantly expand access to books in South Africa. Under current South African legislation, all books are subject to the standard 14% rate of value added tax, but we believe that a tax on books is a tax on learning, knowledge and literacy. Granting a zero-rating would serve to prioritise measures to promote literacy and education.

A copy of our full proposal is available online.

Subsequent to launching this policy proposal, the DA has sent a copy of our research and proposal to the Minister of Finance, Pravin Gordhan, launched a petition and consulted with various entities to gather together a critical mass of support for this important fight to make books more accessible to everyone, including schools, libraries and universities, and thus expand literacy and education.

Our proposal has been met with wide-ranging support from all sides of the political spectrum. During deliberations on the fiscal framework and revenue proposals, the People's Budget Campaign, a civil coalition comprising of the Congress of South African Trade Unions (COSATU), the South African Council of Churches (SACC) and the South African Non-Governmental Organisation Coalition (SANGOCO) came out in support of the DA's proposal to zero-rate VAT on books. There is strong support from all corners for a de facto education and literacy subsidy of this kind, and the Parliamentary Budget Office needs to be tasked with investigating this proposal further.