Call to cut VAT on newspapers

PRESSURE is growing on the Government to scrap VAT on newspapers as a way of helping an industry facing rising costs and falling revenues.

In a presentation to almost 50 TDs and senators, the industry body Newsbrands Ireland, along with Local Ireland, called for the rate to be reduced to zero in the Budget.

The lobby groups argued that VAT on newspapers is a tax on information, learning, and democracy. The current rate of 9% is one of the highest in Europe, with 22 other countries, including the UK and Norway, on lower rates.

A change to EU rules means a zero rate of VAT can be applied to newspapers and digital subscriptions – a move that has been recommended by the Future of Media Commission.

The industry said it has faced key challenges over the past decade with the rise in digital platforms which accounts for 85% of the digital advertising market in this country. There is a major issue in getting paid for publishers’ content online while print sales continue to fall and advertising revenues decline.

Energy costs have increased threefold while the cost of paper for printing has gone from €390 per tonne to €960 per tonne.

The briefing was told that the audience for domestic journalism has never been higher, but this growing audience has been difficult to monetise. The creators of news are not being rewarded for their work despite a study in the UK found that news content is worth €1.2billion to Google and Meta.

Speaking at the event, Colm O’Reilly, chairman of Newsbrands Ireland, and CEO of the Business Post, said a VAT reduction ‘will provide the sector with the financial leverage to continue its investment in the transition to digital and facilitate the ongoing investment required to support publishers in their continued transformation to competitive online models’.