“We expect that a reduction in VAT will produce work in the industry,” says UJF president Hanne Aho on the prospective tax cut. “Tax relief can’t only benefit crucial development work or the owners.”
VAT on e-publications will be reduced starting July 2019, when the tax rate will be cut from 24% to 10%.
The draft amendment to the law is currently under review. The issue has broad cross-party support in parliament, and the change to the law is expected to pass unopposed.
The change to the VAT rate, which has long been urged by the UJF and media industry, became possible when the EU decided earlier this autumn that member states can cut VAT on e-publications to the same level as that on printed publications.
The UJF has argued for that lowering VAT in the industry would directly benefit media houses, as their financial situation directly affects job numbers. The prospective cut in VAT is good news for the industries, which in recent years has been subject to successive rounds of redundancy negotiations and job cuts.
“If the operating environment is more stable, jobs will be safe”, says UJF president Hanne Aho.
The estimated cost benefit to the media sector of the VAT cut will be about €10 million. According to a recent labour market research report commissioned by the union, the average pay of journalists in regular employment is €3 795. Taking into account employers’ non-wage labour costs, the extra €10 million could pay for roughly 200 more jobs in the industry.
“We expect that a reduction in VAT will produce work in the industry,” says UJF president Hanne Aho on the prospective tax cut.
“Tax relief can’t only benefit crucial development work or the owners,” says Aho. “Some of the money must reflect in new jobs. The decision aims to further good journalism. And good journalism requires people to do it.”