In acknowledging that Ireland’s media industry is facing critical long-term challenges to its survival, the recent Commission on the Future of the Media urged the Government to reduce or eliminate VAT on newspapers (it is currently levied at 9 per cent). The case is made not only in terms of saving jobs and a vulnerable industry, but on the propriety of “taxing knowledge” and the need to secure a vital pillar of our democracy, the means to hold power to account. It is a call which media organisations, representing national and local outlets, have echoed urgently as the budget looms.
Ministers promised to consider the issue sympathetically if the EU allowed it under its VAT rules; the European Commission has confirmed that it has no objection. Ireland’s VAT rate for newspapers remains among the highest in Europe, where 19 states tax newspapers at 5 per cent or less and, unlike Ireland, 13 provide direct subsidies to press publications. The cost to the State of zero-rating VAT for newspapers here is estimated at a relatively modest €18 million, but a sum that could provide a vital lifeline.
Digitalisation and the emergence of social media has transformed the viability of the global news industry, undermining the economic model on which it depends to survive. Nationwide there has been a catastrophic halving in both print circulation and advertising revenues; in 10 years, daily circulation is down 330,000, and print advertising down €92 million. And yet the demand for what those outlets produce is increasing to the point that in May 2022 the reach of print and digital news platforms extended to four out of five adults (82 per cent). The issue is one of monetisation rather than relevance.
Newsgathering, whether reporting on the local courts, councils, national parliament, or casting an independent light on the exercise of power, is an expensive, vital service to our democracy. And it is one that the giant social media companies, which profit on republishing the industry’s work, will not provide. That service needs to be protected by the State. Zero VAT would help to do so.