The government will examine a proposal to reduce or abolish the VAT rate on newspapers before the September budget, the finance minister has confirmed.
Print and online publications are subject to 9% VAT and, in an effort to address the difficulties faced by the news industry, the Future Media of Commission yesterday recommended reducing or eliminating the tax altogether .
A spokesman for Finance Minister Paschal Donohoe confirmed to the Irish Daily Mail last night that the proposal would be considered ahead of the September budget.
“Following the modification of the VAT rates dossier in April this year, it is now possible to apply a zero VAT rate to newspapers,” he said. “It’s something that will be considered by the minister as part of the normal budget process.”
Taoiseach Micheal Martin said the government would consider the proposals, but warned there could be “limits” to what could be done under EU law. The Commission on the Future of the Media has recommended that the VAT on newspapers be reduced to zero.
In December, the EU approved rules that will allow member states to exempt VAT on journalistic publications in a move that recognizes “the vital role of the press in democracies”.
EU finance ministers have adopted amendments to the EU VAT Directive which will allow states, including Ireland, to adopt a 0% VAT rate on print and online journalistic publications. The long-awaited Future Media of the Commission report was released yesterday.
Mr Martin said: “In terms of zero VAT, the government will look at that, but there are limits in terms of EU VAT directives and VAT legislation.
“We will be looking at a number of recommendations relating to the print media, defamation being another, which we are actively pursuing in terms of reforming defamation laws.
“But we will be looking to see what we can do financially around taxation to ease the pressure on print media and we recognize that print media have huge challenges.”
Media Minister Catherine Martin took note of the recommendation and pledged that it would be considered. She said: “The implementation group will look at this together with the Department of Finance. As the Taoiseach said, there may be limitations compared to EU rules.
DMG Media CEO Paul Henderson said yesterday that the company supports an end to ‘taxing on reading’. The company publishes titles such as the Irish Daily Mail, The Irish Mail on Sunday, Extra.ie and Evoke.ie.
“As a media publisher, we will always place quality content at the center of our print and digital brands,” he said.
“The report recognizes the importance of professional career journalism to society as a whole. We now need to see a clear path to end the taxation of reading in Ireland.
NewsBrands, which represents national newspapers, print and online, said a reduction in VAT would ensure the public has better access to quality journalism.
A spokesperson said: ‘Several European countries already apply zero rating to support journalism while also providing a range of other aid.’ The most important decision the government can take to immediately support the news publishing industry would be to introduce a zero VAT rate on print and digital newspapers in the 2023 budget.’
Fianna Fáil Senator Malcolm Byrne said: “Newspapers and magazines inform our daily lives. They are essential in the same way as books.
He added that it would be “beneficial, in particular, to support local and national media”.