Higher VAT ‘catastrophic’ for newspapers

Hotels and restaurants are not the only businesses that will be affected if Minister for Finance Michael Noonan decides against maintaining the temporary reduced VAT rate of 9 per cent – newspapers will be too.

After speculation that Noonan will bring the rate back up to 13.5 per cent in next week’s budget, the National Newspapers of Ireland (NNI) body has written to the Minister outlining how publishers are “gravely concerned” by the prospect.

"We have consistently sought to have VAT on newspapers reduced to – at worst – a marginal rate of 5 per cent, but ideally to zero," NNI chairman Matt Dempsey says.

The NNI, which wrote a previous letter to the Minister on the topic in July, argues that VAT on newspapers represents a “reading tax” and an “unfair levy on information” that undermines newspapers’ role as a democratic watchdog. Its most recent letter also cites the difficulties faced by the industry.

“At a time when both consumers and industry are facing daily challenges, it will prove catastrophic if the decision is made to revert to the 13.5 per cent rate,” Dempsey writes.

Across the 27 EU states, nine countries apply a VAT rate between 0 and 5 per cent to print newspaper sales, while 11 states apply a reduced rate of between 5 and 10 per cent.

Meanwhile, the European Newspaper Publishers Association has repeatedly called on the EU to harmonise VAT rates between digital and printed publications – while printed newspapers are subject to the reduced rate, online editions are charged at the standard rate, which in Ireland is 23 per cent.