Punka remarked that the current situation in the publishing industry is quite favorable and offers some stability. Growing costs, however, are a major cause of concern. Last year, for the first time in Latvia, the average print run of books dropped below 1,000.
For this reason, it may be a good idea to apply to books a 5% VAT rate instead of 12%, as this would preserve stability in the industry, she said. In connection with this, she noted that the average VAT for books in the European Union is 7%, whereas in certain countries it is even less than 5%.
Punka also mentioned that publishers believe the Finance Ministry's estimates of the impact of reduced VAT on the state budget to be exaggerated. The Ministry of Finance estimated that this would cost the state budget several million euros next year. Punka explained, however, that the funds would return to the economy in the form of higher salaries and increased turnover.
The publishers also believe that discussions about applying reduced VAT rate to audio and electronic books should continue, even though, as Punka stated, the e-book market in Latvia is very small.
