News / 04.10.2013

Finnish MPs show concern over weakening finances of newspapers

Linus Atarah

The question, tabled by Sinuhe Wallenheimo of the National Coalition Party and supported by 17 other MPs from nine different political groups wants the government to address the question whether the introduction of valued-added tax on newspapers has had negative impact on the competitive ability of newspapers, on the economy as a whole, and what the government plans to do about it.

At the beginning of last year the government introduced a value-added tax of nine per cent on all newspaper and magazines subscription, followed by a further ten per cent increases this year. Newspaper subscription did not previously carry any tax. The introduction of valued-added tax has made Finland one of the most heavily taxed newspaper countries in Europe. It is widely believed that the introduction of newspaper value has accentuated the financial distress of newspapers leading to job losses.

The circulation of newspapers has been on a steady decline over the past several years but the situation worsened further last year with over five per cent decrease in circulation. According to newspapers publishes, the biggest print media houses experienced a 110 per cent decline in revenue between 2012 and 2013, with an attendant loss of jobs in an industry struggling to cope with the enormous transformation in the media environment due to digitalisation.

From the year 2008, over 1000 journalists have lost their jobs and the haemorrhage is continuing this year with several media employers engaged in lay-off negotiations with journalists’ trade unions.

However, the parliamentary question has side stepped the issue of 24 per cent value-added tax levied on online editions of newspapers. The circulation of printed newspapers has declined and newspaper readership has gradually shifted online where the mechanisms for earning more revenue has not yet been developed.

“It is nice that the badly timed decision to impose a value-added tax has been realised at last. The next thing is to reduce the value-added tax of print and digital newspapers to the same level and as low as possible”, said Petri Savolainen, a director at the Union of Journalists in Finland.

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