Sir, - I wish to reply to your correspondent Kevin Mansfield (July 10th), and to other commentators who have misunderstood the case for removing VAT on newspapers sold in Ireland.
It is quite true that British newspapers sold in this State must pay VAT at 12.5 per cent, as must indigenous Irish newspapers. But the fact is that some British newspaper publishers are able to absorb the cost of Irish VAT into their overall cost structure, and simply do not pass the cost on to Irish readers.
Witness the example of the Sunday Times, which is sold in Britain for Stg£1 and in the Republic of Ireland for IR£1. Leaving aside minimal exchange rate considerations, this clearly represents a discount of 12.5 per cent the cost of Irish VAT.
This cost is borne by News International, the publishers of the Sunday Times. because they are desperate to make the circulation gains in Ireland which are so difficult to achieve at home. In fact, absorption of VAT is the least of their sacrifices they regularly sell the Times, the Sunday Times and the Sun at ridiculously low prices, which cannot possibly cover the marginal costs incurred.
Interestingly, the Sunday Times costs almost £3 in Brussels - a mere train journey away from London! And of course Belgium, like Britain, applies a zero rate of VAT on newspapers in the domestic market.
Irish newspapers do not pretend that the removal of VAT will solve all their problems. But as part of a co ordinated package, including perhaps reform of our hopelessly archaic defamation laws and the introduction of legislation to prevent the below cost selling of newspapers, it would certainly be a step towards preserving the plurality and diversity of what remains of the indigenous Irish newspaper industry.
I would suggest that we must not fall into the trap of doing nothing at all, because no one step can solve the entire problem. - Yours, etc.,
Co-ordinating director,
National Newspapers of
Ireland,
Clyde Road,
Dublin 4.