News / 18.01.2012

Finnish Political party newspapers in big squeeze

The newspapers are caught in a double bind: on the one hand a law which comes into effect this year imposes a 9 per cent value-added tax on all subscription newspapers and magazines, and on the other the taxman claims that some party newspapers have to payback large sums of unpaid value-added tax arrears. Party newspapers are given free of charge to their members, and according to the tax administration, that is a considered a service provided without a value-added tax to their members and therefore should be paid back. The case has to yet to be resolved by the Administrative Court.

Both of these measures will cause a huge dent in the finances of political party newspapers, a number of who already face considerable financial difficulties, and have already shut down some regional publications. The Social Democratic Party has for instance, closed down five regional newspapers towards the end of last year.

“Other political parties have already given up their regional political party newspapers. Their time is beginning to be over”, Mikael Jungner, Secretary of the Social Democratic Party told Helsingin Sanomat.

Similarly the Centre Party also closed down its regional newspaper, Karjalainen last spring due to the party’s poor showing in the last parliamentary elections which resulted in reduced financial support.

In Finland political parties are provided with state financial support in their information dissemination activities in proportion to the size of the party – determined by the number of parliamentary seats. But the government has scaled back its financial support to the political parties’ information activities from 18 million Euros to 16 million in this year’s budget.

Many of the party newspapers are also facing potential financial damage from unpaid value-added tax which is yet to be resolved by the Administrative Court.

If the court rules in favour of the tax administration that the party newspapers have avoided value-added which stems from free distribution of newspapers to party members, then Vihreä lanka, mouthpiece of the Green Party would have to pay back 500 000 Euros. The National Coalition Party’s media on their part would pay back 800 000 Euros. The same applies to other party newspapers.

“If the interpretation of the tax administration is upheld it would endanger the future of Finnish political newspapers”, says Panu Laturi, Secretary of the Greens.
The disappearance of political party newspapers from the scene would be damaging to journalistic pluralism in Finland, according to Arto Nieminen, President of the Union of Journalists in Finland.

From the perspective of freedom of speech and diversity of information, says Nieminen, people should have information from multi-channels and so according to him “it is very alarming” that the party newspapers are facing the threat of extinction.

The only way out of the situation is for the parties to increase the circulation of their newspapers and that can only achieved by a little more support from the government.

But any such support should not be used by the political parties on television advertisement during elections, for instance, but on core journalism activities, says Nieminen.

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