It's gone first. two years of pandemic Covid-19, then the disrupted supply cycle of cellulose from Asia, and now the rushing inflation and the still ongoing war in Ukraine since the end of February. All these factors affect the crisis in the publishing and bookkeeping industry. This in turn deepens the problem of reading.
Reform of VAT rates
Since last year, when the crisis of publishing companies due to successive waves of pandemics has developed at an alarming rate, Poland has tried through various aid schemes and financial support to both readers and accounting companies.
Also in 2021 In view of this crisis, Poland has applied to the European Commission for a reduction in VAT. The EC has not agreed to an exception in connection with the existing rules Directive 2006/112 to 28 November 2006, VAT Directive. However, she supported Polish demands for greater freedom to apply reduced rates.
So far, there have been no exceptions to VAT harmonisation. The Ministry of Finance stressed that the value adopted in Poland is at the same time the lowest rate that can be used in the EU in accordance with the VAT Directive for goods such as books (printed and on electronic media) and press.
5 April ECOFIN adopted changes to the point. 6 Annex III EU Directive Directive 2006/112, to provide more flexibility for VAT rates. Thanks to this amendment, printed books, e-books (which are calculated on the basis of cover paper prices) and newspapers will be included in reduced or even zero VAT in all Member States.
Directive, publishing and accounting industries and inflation
The initiative to reduce VAT rates in both publishing and accounting industries, as well as among people of culture or readers, was adopted very positively. The serious problems of Polish publishers began shortly after the outbreak of the pandemic and from past 2 years they feel the effects of it.
Over the last months, the price of paper and printing materials has increased, resulting in a distorted supply cycle and an increase in cellulose prices from Asia. We are seeing rising prices of energy raw materials and fuels, transport problems and high demand despite limited availability.
In addition, Russia's attack on Ukraine caused a problem not only with limited availability, but also with the need for further energy subsidies resulting from sanctions imposed on the aggressor. All these factors affect the inflation of book and press prices, making access to them difficult for the average consumer.
The prices of books in the soft frame are increased by about 10 – 15%. The increases concern not only opening positions, but also renewals – these titles brought about 5 – 10 PLN.
Amendment of the EU VAT Directive, more specifically Annex III to this directive in early April 2022, is intended to allow Member States to benefit more freely from the possibility of reducing the rate of value added tax, and in theory this reduction should translate into a reduction in prices. Book publications are taxed at the lowest possible rate until recently. 5% Press releases benefit from a reduced rate of 8%
Deputy Minister of Finance, Minister of State of MF Artur Soboń assures that the Ministry of Finance carries out analyses concerning, among others, the extent of changes or benefits for individual market participants and the potential financial consequences for the revenue and spending side of the state budget.
The growing inflation is not a secret, and here the question arises whether even if Poland decided to introduce such a reduction, the lower VAT rate would actually affect the price of books and the press. Furthermore, would consumers feel this reduction in their portfolios?
It may happen that the bookkeeping industry affected by the pandemic will want to consummate prices.