Mexico City bookstore El Péndulo, located in Polanco. Mexico City bookstore El Péndulo, located in Polanco.

Tax changes urged to encourage bookstores

Book sales declined 6.3% last year, creating a crisis for the industry, say trade organizations

Changes to the tax system are needed to increase the number of bookstores and reverse the decline of book sales, according to two key players in the publishing industry.

The National Chamber of the Mexican Publishing Industry (Caniem) and the Association of Mexican Booksellers (Almac) say the sector is currently facing a crisis, emphasized by a 6.3% drop in book sales in 2016 compared to the previous year.

In total, 137.4 million books were sold in Mexico last year, slightly more than one book per person.

The two organizations argue that the value-added tax (IVA) system as it currently applies to the bookstore sector is bad for business because it doesn’t allow sellers to recover expenses in the same way that other businesses can.

Bookstores are exempt from IVA but both Caniem and Almac have pointed out that there are fewer tax benefits from being exempt from the tax than being in the zero-rate category.

The operational costs of a bookstore are consequently very high, hindering them from reinvesting in their business in a way that would strengthen their relationship with the book-buying public, create more jobs and improve book sales, Caniem president Carlos Anaya Rosique said.

He said it was essential that bookstores be allowed to transition to the zero-rate category, adding that such a move would result in a greater variety of books being sold, give established businesses a better chance of keeping their doors open and even help boost the number of bookstores.

“. . . It’s much better to have 300 titles that sell 1,000 copies each than one title that sells 300,000 copies. It’s also much better to have 300 small bookstores scattered throughout the country . . . than three large ones in one, two or three cities that compete with discounts and concentrate on the highest-selling titles, eliminating the rest,” he said.

Anaya also said that growth of a black market for books has further damaged the industry because illegal and unregulated sellers sell at prices that legal businesses cannot match.

“. . . A change to the tax system would result in the strengthening of the legal sector,” he said.

On the other hand, if the status quo is maintained and book sales continue to decline, the closure of more traditional bookstores will inevitably follow.

“You forget that it’s culture,” Anaya said, adding that he is skeptical that the industry will recover.

Anaya also said that in the eyes of Mexican society, books — paradoxically — are not held in the same high esteem as the process of reading itself.

“We have a very high appreciation for reading and we make great campaigns to promote reading . . . it is of great symbolic value for us but the same doesn’t happen with a book. Reading has great value but the book is totally devalued [and] depreciated,” he said.

Source: Milenio (sp)

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