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Reuters Institute boss: VAT on digital publications is 'backwards' and subsidises 'media habits of old people'

Reuters Institute

Value-added tax levies on digital publications are “backwards” and subsiding the “media habits of old people” at the expense of the young, the director of the Reuters Institute for the Study of Journalism has said.

Dr Rasmus Kleis Nielsen also said governments could do more to reduce the costs of journalism by making ministers available at regular press conferences and increasing the availability of “structured data”.

His criticism of VAT rates on electronic publications comes after European Union finance ministers agreed a proposal to bring the rates in line with those of print titles in October last year.

In the UK a standard-rate VAT of 20 per cent still applies to digital publications while zero VAT is put on print publications.

Speaking at a media sustainability panel event during the Defend Media Freedom conference, co-hosted by the UK and Canadian governments, Nielsen laid out a few ways the Government could help the press stay afloat.

He said: “Right now many European Union member states give VAT exemptions to print publications but not to digital publications, that seems somewhat backwards to me, effectively subsidising the media habits of old people at the expense of the media habits of young people.”

Nielsen also argued that having an open government would help keep costs down, saying: “On the cost side it is very clear public authorities can reduce the cost of doing independent, professional journalism through freedom of information rules, open government, the availability of structured data and by making ministers available to journalists.

“For example, one could commit to regular press conferences where ministers actually answer questions from reporters themselves, not through spokespeople.”

The latest annual digital news report produced by the RISJ praised the Belgian federal government’s decision to cut digital VAT rates to zero.

Trade bodies the News Media Association and the Professional Publishers Association have both called on the “digital reading tax” to be scrapped in the UK.

Research by the PPA released last year claimed that scrapping digital VAT rates would cost the Treasury £210m in 2019/20.

Picture: Reuters Institute for the Study of Journalism

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