A reduced value-added tax is a long overdue and hard-fought decision. While in the European Union this tax rate is set at 6.6% on average, in some countries even 0% it was one of the highest in Latvia at 12% and 21% in the past. In recent years, the Latvian book market has contracted rapidly – the average circulation and number of newly published books and library purchases have declined.
The VAT reduction is currently a lifeline for the Latvian subscription bookstore and digital media market, said the chairman of the board of the publishers association, Renâte Punka: by this percentage rate reduction VAT. For a book that currently costs $ 2, that probably won’t be such a big discount. On the other hand, for a book that now costs € 20, € 30, € 40, there will be a reduction. “
However, the new printed press will not get any cheaper. On the contrary, the reduction in VAT will reduce the potential price increases that inevitably await the industry as a whole.
Māris Anès, director of the publishing house “Žurnāls Santa”, predicts that the prices of printed materials could increase by 10 to 15%, which could lead some media to consolidate or terminate their activities.
It’s a different story with electronic media. While elsewhere in the world digital magazine and newspaper subscriptions have become a normal consumer product, this market is developing in Latvia. For this sector, the reduction in VAT will be even more pronounced.
The Ministry of Culture estimates that the reduction in the VAT rate on printed publications for the publishing industries in general will allow total support of 4.75 million euros.
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