Sir, - I fail to see what all the hoo-ha is about reducing the Value Added Tax on newspapers from 12.5per cent to zero per cent. My understanding of Value Added Tax is that whilst newspapers in the United Kingdom are zero rated under the UK tax regime, all newspapers in the Republic of Ireland are presently rated at 12.5 per cent and the Times or Daily Telegraph when ultimately sold to the reader at the newsagents, realise to the exchequer the exact same percentage of revenue (11.1 per cent). Therefore, if the VAT were zero rated for Irish papers, it would have the same effect on UK papers.
The following are a few examples of price reduction to be made were this to happen.
Publication Price inc. Price excl.
12.5% VAT 12.5% VAT
Irish Times .. 85p 76p
Cork Examiner.. 85p 76p
Financial Times .. 85p 76p
London Times .. 30p 27p
Daily Mirror .. 45p 40p
Daily Mail .. 50p 44p
It therefore seems to me that the requested reduction in VAT will do nothing to make Irish newspapers more competitive than their UK counterparts selling in Ireland. Also, my recollection is that when VAT on newspapers was reduced from the high to the intermediate rate some years ago many publications did not reduce the cover price by the full reduction in tax. Yours etc.,
Green Hill, Fermoy