December 20, 2022

16.09.2022. A pre-Budget briefing in Leinster House held by NewsBrands Ireland and Local Ireland was attended by almost 50 TDs and Senators . National and local news publishers and leading newspaper editors were also in attendance.

In a joint presentation, the representative groups for national and regional newspapers set out the challenges being faced by the industry and called for VAT on newspapers and digital subscriptions to be eliminated to 0% in the forthcoming Budget.

At 9%, Ireland has one of the highest VAT rates on newspapers and digital subscriptions in Europe. 22 European countries including Denmark, the UK, Belgium, Norway, Austria and France, have lower rates of VAT on newspapers, as well as providing other direct and indirect supports for journalism.

Under new EU Vat rules, agreed by the EU finance ministers, Ireland can now apply a zero rate of VAT to newspapers and digital subscriptions. The Future of Media Commission has also recommended a zero rate be applied.

The bodies said that three key trends have disrupted news publishing in the past 10 years.

They are the rise of digital platforms: they hold 85% of the digital ad market in Ireland, and have proven very difficult to negotiate with regarding fair payment for their use of news publishers’ content; the decline in print sales and the decline in advertising revenues.

In addition, since the start of 2022, energy costs have increased three-fold 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 across print and digital platforms at 82%, but this growing audience has been difficult to monetise. The digital news ecosystem rewards the distribution of content by platforms vastly more than its creation by publishers. A study in the UK found that news content is worth £1bn to Google and Meta.

The lobby groups argued that Vat on newspapers is a tax on information, learning, and democracy.

Speaking at the event, Colm O’Reilly, Chairman of NewsBrands Ireland, and CEO of the Business Post, said a VAT reduction would represent a significant stimulus for both local and national news publishers.

“At a time of significantly increased business costs, it 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, he said.

A zero VAT rate would lead to the following benefits to the journalism industry:

• Reducing the VAT rate to zero will immediately enhance the viability of the Irish news publishing industry and place it in a far stronger position to tackle the scale of the challenges it faces

• A zero VAT rate will provide the sector with the financial leverage to continue its investment in the transition to digital.

• It would signal the government’s support for the role of quality journalism in a democracy and an awareness of the democratic deficit that could result from its absence.

• It will facilitate the investment required to ensure citizens have access to fact-checked, trusted journalism

For more information, see the NewsBrands Ireland and Local Ireland’s submission to the Department of Finance https://newsbrandsireland.ie/im/2022/07/vat.pdf