Jim O'Keeffe
Ceist:34 Mr. J. O'Keeffe asked the Minister for Finance whether VAT on the cover charge of newspapers in Ireland is the highest in Europe; and the proposals, if any, he has for change in this regard.
Written Answers. - VAT Rate on Newspapers.
Our VAT rate on newspapers is 12.5 per cent. This is higher than the corresponding rate in the other European Union countries. I should explain that the 12.5 per cent rate is the reduced rate of VAT in this country. Under the EU VAT rates directive, member states have the option of applying a reduced rate of VAT, of at least 5 per cent, to newspapers and those member states which applied the zero rate to newspapers on 1 January 1991 can continue to do so on a transitional basis, but it is not open to member states to introduce new zero rates.
Any change in the VAT treatment of newspapers could not take place in isolation; inevitably other goods and services which are currently at the 12.5 per cent rate would seek a similar reduction. Accordingly, in view of the considerable Exchequer cost of such a move, I have no plans at the moment to reduce the rate of VAT on newspapers. I should add that, in the normal course of events, the scope and level of the reduced rate would fall for review in the context of the annual budgetary process.